Quigley’s right: Morrow says $15bn NBN blowout “mostly” relates to MTM

110

news NBN chief executive Bill Morrow this morning broadly confirmed analysis by his predecessor Mike Quigley showing that the up to $15 billion blowout in the NBN company’s costs was due to the Multi-Technology Mix imposed by Malcolm Turnbull, in a move that appears set to increase the pressure on the Government over the issue.

In August this year, the NBN company revealed the project’s funding requirement had blown out by between $5 billion and $15 billion compared with the Strategic Review conducted by NBN Co executives in late 2013 after Malcolm Turnbull became Communications Minister.

In August, Turnbull stated that the new cost estimates — including the multi-billion-dollar funding blowout — were based on the fact that the NBN company now knew more about deploying high-speed broadband than “anyone else” in Australia. “All of that information and experience,” the Minister said, had led to its revised funding estimates.

Turnbull accused the previous management of the company — led by chief executive Mike Quigley — as being incompetent when it came to its financial modelling.

However, in an interview with the ABC’s Background Briefing program last week, Quigley stated that the cost blowout was in fact due to the Multi-Technology Mix imposed on the NBN by Turnbull. This model reuses the ageing copper and HFC cable networks owned by Telstra and Optus and is technically inferior to the original near universal Fibre to the Premises (FTTP) model instituted by Labor.

Quigley also released an extraordinarily detailed document detailing the financial basis on which he had made the claim. The document can be downloaded online here in PDF format.

Speaking at the NBN company’s quarterly financial results briefing this morning, Morrow stated that the increase in the NBN company’s peak funding costs was explained at the August press conference detailing the NBN company’s latest financial results and corporate plan.

“We talked about the $8 billion cost that caused that … it mostly related to the two new technologies that we’re using,” he said, referring to the HFC cable and Fibre to the Node rollouts highlighted by Quigley.

Morrow said from the NBN company’s point of view, the cost increase was “perfectly understandable”.

When the NBN company conducted its Strategic Review in late 2013, he said, the company had not conducted “in-fill trials” for the two new technologies — meaning that it did not have a full picture of their cost. The company has since refined its model, Morrow said.

However, asked point blank whether Quigley’s analysis was “right or wrong”, Morrow said he didn’t “want to comment on a paper that’s been written by someone who’s not as close to the detail or the facts”. “There’s nothing new out there today,” he added.

“I rely on our own analysis here, and I think the company’s down a pretty good job with being able to predict where we would land,” the executive said, noting he believed the NBN company had been “prudent and responsible” in its forecasting.

The NBN company’s blowout may not end up being as large as $15 billion, with the company having previously put a range of between $5 billion and $15 billion on the cost increase. Morrow noted this morning that the company had put a ‘range’ on the increase.

In his analysis, Quigley wrote: “It is time to stop trying to blame the previous Government and management for the problems with the costs and timing of the MTM and admit that the cost to role out HFC and FTTN and the timescale that would be needed were grossly underestimated by the Coalition.”

Image credit: NBN company

110 COMMENTS

  1. No surprises there – what will be a shock is how this is spun in question time.

  2. At least unlike the trusty copper relic, faithful posters, who will never accept blame (in fact even argue that they didn’t say something when it’s copy/pasted right in front of them)… it’s refreshing to see at least one person involved in MTM who finally has the balls to man-up, somewhat.

    Morrow has just jumped up markedly in the cred stakes, IMO and let’s face it, he has a job to do, which is to oversee the government’s policy and being such an abysmal, retrograde policy (they themselves described as FRAUDBAND previously) it can’t be easy.

    • Morrow has just jumped up markedly in the cred stakes

      I’m not so sure about that. I really don’t think one action alone is enough to give him any credibility given his evasive nature in the Senate Estimates.

      • Indeed HC – my reading of this is that he’s being just as evasive here. A statement like ‘the MTM portion of the NBN will account for between 5 and $15bn cost blowout, so we were wrong about both the time line to rollout and the cost of it, so we’ve gone back to the Minister and recommended abandoning this direction because it cannot possibly meet the intention of either faster or cheaper, but the Minister is making us press on regardless’ would be an honest acceptance of responsibility and worthy of respect. But trying to continue to justify this and brush off Quigley’s analysis is nothing but spineless obfuscation and trying to continue to avoid scrutiny and responsibility.

        • Quite possibly gents…

          However, it’s a breath of fresh air in comparison to say a couple of the faithful here at Delimiter who will never man-up and even argue black is white.

          Can you see the method to the madness?

    • Not sure how admitting that there are causal factors in budgetary increases implementing MTM, which has required a radical departure to HFC and FTTB, to being a “man up” event.

      Morrow is supposed to be accountable for his Company’s actions. So if they are going over budget, there needs to be more than an offhand “labor waste!” retort. He isn’t a politician so can’t really play the ‘mauve is now black’ goal-post shuffle.

      The senate wouldn’t really tolerate such responses anyway.

      His job, however, is to implement whatever he is told to implement. If he does so in an accountable fashion, then great; but he has prefaced comments with a suggestion that Quigley should probably shut-up because he isn’t wearing the big boy pants now.

      I’m not sure that’s going to work out well; Quigley isn’t an idiot, was deeply involved with NBNco and is probably in a better place to hold the new management accountable for their own actions, than any number of commentators. :)

      • Gees…

        I agree with what you guys are saying, but please, just read between the lines in what I’m referring to here.

        We now finally have someone in NBN that’s all but admitting it’s MTM that’s fucked… NOT FTTP, NOT QUIGLEY (as we have all been saying) and yet you all now want to discredit him, for doing so?

        I would have thought that would be Richard and alain doing that?

        Anyway, perhaps I’m just looking at this from a different perspective…

        • I’m pretty sure NBNco has already admitted it’s not the choice they would necessarily make.

          Morrow isn’t admitting MTM is screwed; he’s admitting it might cost a little more. Think you are perhaps reading more in the tea leaves than a CEO admitting that they probably need a bit more money to get the job done, due to the changes in methodology. :)

          I certainly don’t read (between the lines or otherwise) that Morrow is suddenly chomping at the bit to drop Turnbull in the proverbial, or that he’s suddenly seen the light; it’s not some watershed event.

          Sorry.

          • All good Brendan, I have read many of your posts and enjoyed and agreed with 99.9% of them… but for the record, what you claim I said here, isn’t what I said at all…

            I was referring to the MTM portion of the NBN, as being the part which has fucked up (as we have all been saying) ala the UPTO $15B… according Morrow.

            At no stage was I suggesting Morrow was saying the MTM in totality is screwed. Although to be fair, reading back, I perhaps could have expressed it a little more eloquently.

            But TBH I didn’t think the fellow FttP people would take such exception to anyone innocently suggesting it was a good thing, the boss from NBN finally admitting MTM not FttP was the part which blew out and thus vindicating Quigley and in fact, us all.

            Anyway, enough in fighting…lol

  3. Morrow said from the NBN company’s point of view, the cost increase was “perfectly understandable”.

    Cause and effect. Remember though, because it isn’t fibre being used, endless cost overruns are justifiable^.

    MTM originally sought to solve a problem that didn’t exist; namely how to leverage existing assets at a reduced cost; it’s the model used by existing incumbents to extend value and life from Copper assets.

    Turnbull expected NBNco to enact a policy designed for an incumbent; and if it was, then yes, it would have been cheaper/ quicker, in the short term. Because when you already have the asset and the support structure for it, there are potential gains, versus over-building.

    NBNco has neither of those things. It’s had to buy into a network that it then needs to extend and manage and operate.

    Morrow can’t really claim moving to a model — that involves upgrading and managing someone else’s network — is going to not carry a financial penalty.

    Of course, this makes the social media team’s response all the more hilarious and incongruous with the facts.


    ^it is (arguably) not waste when done by entities seeking to maximise shareholder value within it’s own assets. It is astronomical waste when you don’t even own the network that you are trying to maximise value in, and have to go buy large portions of it first.

  4. Basically Morrow’s statements read to me like damage control and spin nothing more. Sounds to me like Quigley snookered the MTM crowd so they can’t just blithely support the LNP outlandish claims anymore trying to sink his and his former boards reputations in the process.

    ““I rely on our own analysis here, and I think the company’s done a pretty good job with being able to predict where we would land,” the executive said”
    I’m sorry but if he believes landing anywhere within a $10 billion dollar range for a cost overrun is a good prediction I hate to see what an average or bad one would look like.

    “Morrow noted this morning that the company had put a ‘range’ on the increase.”
    Personally I think such an action is simply being fiscally irresponsible with taxpayers funds (aka monopoly money apparently). I mean what other kind of organisation would put up with a ‘range’ that large, its like saying we don’t know what we’re doing (yet) so we’ll hedge our bets by an insane amount each way just in case.

    “There’s nothing new out there today,”

    so much for more transparency ….

    • @s Morrow said what any competent manager would. NBNCo didn’t prepare the SR13! It is not his blowout, asked to prepare the CP16 they did with the best informations available. The failure to match SR13 numbers is not unexpected (actually predicted before its release). The two documents were prepared by different teams (note jk).

      Again the most significant story is completely ignored. In attacking the new management Quigley finally revealed the actual fibre CPP costs, and no surprise they were the same as used in SR13 (allowing for differences in opex / capex allocation). His model peak funding destroyed, blowing out to $73b! A few stories already re $5-15b blowout, zero acknowledging Quigleys FTTH $30b blowout. Zero!

      Right up to the election Quigley was claiming rollout on target and budget, his owns word exposing the deception. Costs much higher than forecast in any of his CPs, rollout not on target.

      Clearly transparency means differnet things to some, however the financial definition is clear. Exposing the cost increases is transparent, feeding BS to an amoured media is not.

      • Turnbull
        “On October 3 the Government asked NBN Co to undertake a Strategic Review of this vitally important project.”
        “I congratulate and thank the team at NBN Co and its advisers who prepared the Strategic Review”
        “The internal NBN Co team was led by its Head of Strategy and Transformation, JB. Rousselot, and ably supported by Tim Ebbeck and many others. ”
        So yes NBN did prepare the document. It might have been prepared by different teams but still made by NBN.

        Yet what figures are the same. So far all are cheaper than whats in the SR. Plus your assuming that cost for FTTP wont go down when there is evidence to the contrary. But then why would the Gov want to acknowledge Quigleys $30B blowout when they have a $27B blowout of their own.

        What BS would that be Richard $15B blowout without building anything in 2 years or 1 if you count last years CP which was a rehash of the SR. The $12B blowout in 3 months or the $27B blowout in 2 years.

        If you want transparent why not release the unredacted SR. But then we have Turnbull blaming Labor and the last managment on the failing of the MTM.

        • @jk sorry you are correct, SR13 was prepared by NBNCo. They are entirely at fault with the changing MTM figures (blowout).

      • Of course it’s not Morrow’s blow out… it’s your blow out Richard…

        Well after all, Morrow wasn’t the one who claimed that it was if “he was commissioned to write it, was he”?

        ;)

      • His model peak funding destroyed, blowing out to $73b!

        Ah yes, let’s ignore the inconvenient facts Richard which clearly show FTTP costs coming DOWN as the rollout techniques and technical innovations roll through!

        Already we’ve seen this evidence attempt to be buried by you and your stuck in the past lib mates!

        I know for a fact that one area of significant cost savings (and massive rollout speed boats) from project fox was the use of new smaller GPON multi-ports that don’t require Telstra to replace standard size pits with double size pits.

        That plus architecture 2.0 had nearly halved the cost of rolling out FTTP.

        You only need to look at Verizon’s experience, they eventually got the cost down to ~$600 USD per premises passed (not including connection) to see what is possible!

        • Derek O,

          Why do you keep rabbiting on about Verizon figures as if that’s the end to any FTTN vs FTTP costing discussion, Verizon is one player on the world BB infrastructure stage.

          You cannot compare a private company in the USA rolling out FTTP to selected areas of the USA, the choice based on where they think the customers are for maximum profit into larger population densities and larger cities than we have here to a Government backed national FTTP rollout in Australia to 93% of residences, and then make the glib statement oh if Verizon can do it for $xx that’s what it would cost here.

          BT is rolling out both FTTN and FTTP, they state not only is FTTN quicker to deploy it is markedly less costly than FTTP, but hey what would they know, they are only rolling out BOTH infrastructures in the UK.

          A Verizon competitor in the USA Comcast which has the largest share of the USA BB market has a large HFC infrastructure which they are upgrading to DOCSIS 3.1, if they thought HFC was not cost effective and future proof surely they would have shut it down and built FTTP in its place.

          • “Why do you keep rabbiting on about Verizon figures as if that’s the end to any FTTN vs FTTP costing discussion…”

            Why do you keep rabbiting on about BT figures, even more so, as if that’s the end to any FTTN vs. FTTP costing discussion?

          • “You cannot compare a private company in the USA rolling out FTTP to selected areas of the USA, the choice based on where they think the customers are for maximum profit into larger population densities and larger cities than we have here to a Government backed national FTTP rollout in Australia to 93% of residences, and then make the glib statement oh if Verizon can do it for $xx that’s what it would cost here.”

            Hahaha OMFG I am crying from laughter. Are you kidding me? Talk about cherry picking your argument. Turnbull did *precisely* that when putting together the original LNP policy, released in April 2013. Worse than that, he took a gross oversimplification based on PR spin from international incumbent telcos and directly applied that to NBN Co FTTP construction figures to determine the ‘cost’ of FTTN. In Australia. To a new company that didn’t even own a copper network. Where the copper is narrower (higher) gauge. Where the owner of the copper network had stated over a decade before that the copper was ‘five minutes to midnight’. Where population density is about one eighth that in the UK. Turnbull was the one that decided the gold standard for evidence and argument regarding the NBN was incomparable international examples. And, broadly speaking, the FTTP cost per premises is a far more applicable comparison between countries than FTTN – FTTP needs to be run to each premises, and the actual length of each fibre is almost inconsequential as the fibre itself is relatively inexpensive – the cost increases due to additional time, sure, but it is a much smaller relative increase. You still need to terminate per premises, you still need the same sort of equipment at the end point. So the cost per premises between Verizon and NBN Co should be broadly applicable, and at least instructive.

            The cost of FTTN, however, is completely, vastly different. And yet, we didn’t hear you and Richard railing against Turnbull’s calculations there, did we? You can try to have your cake and eat it too, but your argument is just looking weaker than ever. You’re clutching at rather tenuous straws at this point… And looking rather foolish.

          • UGuest,

            “Talk about cherry picking your argument. Turnbull did *precisely* that when putting together the original LNP policy, released in April 2013.”

            So he used overseas examples to help support a MTM policy decision, the problem is what – you prefer he didn’t?

            ” Worse than that, he took a gross oversimplification based on PR spin from international incumbent telcos”

            You don’t use names, you deliberately keep it vague, assuming you mean British Telecom in this instance although you say incumbent telcos plural, what do you know about being in control of simultaneous FTTN and FTTP rollouts and their comparative costs than BT do to dismiss it as ‘PR spin’?

            “and directly applied that to NBN Co FTTP construction figures to determine the ‘cost’ of FTTN.”

            huh? I have no idea what that means.

            “Turnbull was the one that decided the gold standard for evidence and argument regarding the NBN was incomparable international examples.”

            You are keeping it vague again, which international examples are you referring to and why were they incomparable?

            “And, broadly speaking, the FTTP cost per premises is a far more applicable comparison between countries than FTTN – FTTP”

            It isn’t just because you say it is, I know why you prefer that comparison, because you don’t want to compare FTTN cost per premise with FTTP cost per premise, here in Australia calculated in 2015 it is brownfield FTTP $3700 vs FTTN $1600.

            It’s also best to totally ignore the BT experience that rolling out FTTN is faster than FTTP and it also cost them less.

            “So the cost per premises between Verizon and NBN Co should be broadly applicable, and at least instructive.”

            I don’t agree, for the reasons detailed previously, and if you are going to say that about Verizon and NBN Co , I can also balance it out that using BT and Comcast as examples ‘should be broadly applicable, and at least instructive’.

            “The cost of FTTN, however, is completely, vastly different.”

            Yes I know, it’s cheaper and faster to deploy than FTTP.

          • “Yes I know, it’s cheaper and faster to deploy than FTTP.”

            Prove it?

            Now we wait…

          • Fizz,

            Well there is a link further down, you know it’s there but prefer not to read it.

            https://delimiter.com.au/2015/11/09/quigleys-right-says-morrow-15bn-nbn-blowout-mostly-relates-to-mtm/#li-comment-706295

            and here……

            https://delimiter.com.au/2015/11/02/turnbulls-nbn-blowout-caused-by-mtm-says-quigley/#li-comment-705609

            You read that to, I will select that key statement from BT.

            “We have invested £3 billion ($5.9bn) but to do FTTH (fibre-to-the-home) it would have been ten times that and the speed of deployment would have been at 10 per cent at this point,”

            Now your turn, why have BT got it so terribly wrong, and why do you and other FTTP or bust supporters know more about managing and costing a nationwide rollout of FTTN and FTTP than BT does?

          • Oh Alain, do try to keep up mate:

            https://delimiter.com.au/2012/04/30/fttn-a-huge-mistake-says-ex-bt-cto/

            FTTN a huge “mistake”, says ex-BT CTO:

            One of the UK’s foremost telecommunications experts, a former chief technology officer of British telco BT, has publicly stated that fibre to the node-style broadband is “one of the biggest mistakes humanity has made”, imposing huge bandwidth and unreliability problems on those who implement it, as the Coalition may do in Australia.

            Of course those who still work at BT are going to defend their actions, this is called a$$ covering!

          • Fizz?

            Wow yet more childish imbecility alain… nice work…!

            Wow again, yet another reply to me in one day (but again avoiding the many others comments which refer to your disgraceful contradictions)…avoid, avoid, avoid, as there is no rational explanation… but here you can try to FUD up the actuals. Yes you can try but no banana here sonny…

            So I’ll say it again, for those either hard of hearing or unable to comprehend basic English (pun intended re: the fall back BT spiel)…

            If the HUGE mistake/FRAUDBAND, FttN is cheaper (we are in Australia, in case you haven’t noticed BTW) “PROVE IT”…

            PROVE IT?

            But BT did this and BT did that, lol… err, proves SFA…

            And if it’s faster PROVE THAT TOO…

            Because I can guarantee it isn’t faster… because I would have (even with the minimal, compared to the MTM shemozzle’s complete hold up, fuck up) had FttP now… but yet I do not have FttN/MTM… this proves it is not quicker…

            So here’s some info for you… Mal had a fully costed $29B plan (ahem – BS, ahem ROFL) which has now almost doubled to UPTO (lol) $56B, so bzzzt

            Mal also promised FttN/MTM 25mbps-50mbps for all Australian households by 2016… bzzzt.

            Now that you have a couple of facts for a change…I await proof, not more childish waffle and name calling.

            I guess I’ll be waiting forever…

          • Fizz,

            Yes got all that diverting verbal stocking filler, just say you don’t know more about simultaneous rollouts of FTTN and FTTP than BT or cannot disprove that their statement FTTN is cheaper and faster to deploy than FTTP and be done with it.

          • Blah, blah, blah, NOW…

            Care to PROVE IT this time…?

            No thought not… child :(

            Thanks for confirming the obvious alain and also confirming why you are the undisputed champion of Delimiter bannings due to your repetitive trolling, lack of rationality and introduction of demonstrably false information…

            I see nothing has changed and you have not learnt :(

          • DjOS, do try and keep up mate, it’s 2015 not 2012.

            “FTTN a huge “mistake”, says ex-BT CTO:”

            Of course the keywords are ex BT CTO and the date of the comment, April 2012.

            Since then in 2015 BT are in the midst of G.Fast live trials to residences in the UK, and I am not aware of any mass dissatisfaction on the part of UK FTTN residences connected in the period 2012-2015.

            “Of course those who still work at BT are going to defend their actions, this is called a$$ covering!’

            Yes I am glad you stated it ‘a$$’ covering because FTTN is cheaper and faster to deploy, the a$$ covering is about providing profit to shareholders, which BT do quite well thank you, you also ignored the current up to date 2015 statement by the current BT CEO re FTTN vs FTTP deployments their comparative costs and speed of deployment – why?

          • ROFL…

            Here’s the advert…

            G.Fast delivering those speeds… WE DON’T NEED…(I’m sure you can relate to such a dumbed down 3 word slogan, AGAIN).

            Thanks for the laughs alain..

            And still awaiting the PROOF any PROOF…????

        • Simple Alain, Verizon owns a PSTN, HFC and an FTTP network – guess which 2 of 3 they are choosing to wind down as much as possible?

          • You can ignore British Telecom and Comcast all you like and pretend cherry picking selected high density areas of the USA by a private company where the driving motive is profit profit profit is the same as what the Government backed NBN Co is doing here nationwide.

            You provide the bias and I will keep on providing the balance, if that’s ok by you?

          • “You provide the bias and I will keep on providing the balance…”

            ROFLMFAO

            Now I’ve fucking heard it all alain…

          • Actually Derek…

            To be 100% accurate alain does have balance in one sense, because he says one thing and in the next breath to suit a different narrative, says the complete opposite (as long as it always supports MTM/FttN/the conservatives and/or bags FttP/the commies) and the balance of BS is maintained.

            You may have also noticed that good ol’ alain won’t respond to me…

            Simply because in the past I have made comments which are still constant to this day. Whereas he on the other hand (as mentioned) is stating the opposite now to what he previously did (we don’t need those fast FttP speeds/MTM will have g.fast… HFC failed as will FttP/HFC is great… etc) and he knows I know his baggage and can shoot him down easily. So because I have no such baggage (well I don’t blatantly lie for a blind political crusade) he ergo has no come back, so he just lamely avoids me…

            Cute in a pitiful sort of way eh…lol

      • “Morrow said what any competent manager would.”

        A 10 billion error margin (wholly morrow’s issues since he’s used the GBE to pick sides) is not competent. They are admitting to the tune of $10 billion that they haven’t the faintest idea of what might happen under MTM. These are the so called network building experts that were needed to come in to fix things … yup great call there.

        Show me a company anywhere in the world where a board would survive handing down a budget with $10 billion error margin. Not in the least replacing the former board and coming on board as subject matter experts meant to save the day!??

        “Right up to the election Quigley was claiming rollout on target and budget, his owns word exposing the deception.”

        You conviently missed the parts whereby the old NBN Co cost actually were accurate or savings were had so all the things not MTM were or are under budget. That makes Quigley’s statements of the time accurate.

        Whether he could have kept saying that who knows as we have this mess that we do now instead.

        “zero acknowledging Quigleys FTTH $30b blowout”

        There is no blowout as FTTH PON is dead never to be seen again sadly. Hence the costs you can lay at Quigley’s door are all in his PDF and are all under budget (even given inefficiencies of contractors in drawdown phases).

        Your $73billion is a pure fantasy and one the media can’t be bothered reporting on (thankfully). Saying it would have if …. is pointless as its not going to happen hence all that is relevant is what actually has happened (ie under budget).

        • Remember they are all forward estimates, the Coalition NBN funding requirements were estimates, the Labor NBN funding requirements were estimates, Labor NBN Co increased their funding requirements as the rollout progressed , the Coalition NBN Co increased their funding requirements as the rollout progressed.

          It is drawing a very long bow indeed to state that if the FTTP rollout proceeded as per Labor model at the end of 2013 that in 2015 and beyond there would never be further adjustments upward to FTTP funding requirements, or if there was it would have been a hell of a lot less than the range of $5B -$15B of the MTM model.

          From the latest NBN Co CP 2016 at $3,700 cost per residence for brownfields FTTP against FTTN $1,600 and HFC $1,100, it is certain there would be blowouts in the all FTTP model.

          • It is drawing a very long bow indeed to state that if the FTTP rollout proceeded as per Labor model at the end of 2013 that in 2015 and beyond there would never be further adjustments upward to FTTP funding requirements, or if there was it would have been a hell of a lot less than the range of $5B -$15B of the MTM model.

            Absolute twaddle Alain, NBN Co where implementing Architecture 2.0 and a multitude of performance and cost savings initiatives (see Project Fox) which where actively speeding up the roll-out and driving down costs.

            EVERY FTTP roll-out in the world so far has seen the costs FALL, not rise!

            Chaining us to obsolete technologies is 100% responsible for the 10-15 Billion dollar cost blowout incurred by MtM – that is the Reality!!!

          • “Remember they are all forward estimates…”

            Now there’s some nostalgic gold.

            I recall when there wasn’t a CP for the FttP NBN, people such as you alain whined and demanded one. But when the CP was released, you then simply brushed it.

            Why? Because according to you it was nothing but conjecture based on estimations and therefore insignificant..

            I also recall at the time, people here, such as HC and myself, trying (in vain) to rationally correspond with you in relation to but err alain, all projects are estimated. But alas as far as you were concerned (and are still in most ways) all commonsense and actuals/reality (pun intended) went out the window in a mouth frothing frenzy to try desperately to discredit the very CP, you asked for.. due to it being conjecture/estimated.

            Well, well, well…

            Once again now, we see yet another complete 180 to suit the BS.

            Nice work.

          • Derek O,

            “EVERY FTTP roll-out in the world so far has seen the costs FALL, not rise!’

            Yes it’s amazing that only FTTP roll out costs fall, FTTN, HFC, fixed wireless and satellite costs remain static or they rise I take it?

            You also ignored the costs per premise comparative table, where the only higher CPP to brownfields FTTP is fixed wireless and satellite.

          • FTTB/N builds havent actually changed much – my information is that the build costs have been largely static other than some minor improvement in ISAM costs and capability.

          • Ah yes, lets keep ignoring that NBN Co didnt own a PSTN, didnt have the IT management systems to manage a PSTN, didnt have the staff to maintain a PSTN (needs to un-retire 4,500 copper workers remember) and so on.

            FTTN is ONLY cheaper if you already own a PSTN …. this is why the MtM is going to blow out by at least 8 Billion (Morrow’s number, not mine)!

          • Derek O,

            “FTTN is ONLY cheaper if you already own a PSTN”

            Is that a gut feel thing, or do you have a link explaining why this statement is a undeniable fact ?

          • (Derek) “FTTN is ONLY cheaper if you already own a PSTN”

            (alain) Is that a gut feel thing, or do you have a link explaining why this statement is a undeniable fact ?

            Ask Optus alain…

          • Ask Optus??? huh ??? , so what would their answer be that has any relevance to the question?

          • Wow, you ‘can’ reply to me after all?

            Oh but I see… only when your past, disgracefully dishonest contradictory comments, aren’t being questioned.. otherwise avoid, avoid, avoid.

            Got it.

            “Ask Optus??? huh ??? , so what would their answer be that has any relevance to the question?”

            Ok let me spoon feed you alain…

            No… better still I’ll ask you a very difficult question (for you) .

            1 + 1 =?

            At least give it a shot.

        • @sm the margin is not $10b for capex but peak funding. As posted the other day, read Quigley’s first CP to see a range and why it is used. Revenue is very difficult to estimate, NBNCo has constantly underperformed (again as posted).

          Old NBNCo rarely published actual figures and why Quigley’s PDF is a so fantastic. Old management prefered to talk of future estimates, even costs in other countries. Clealry from the published figures theynwere both delayed and over CPP premises. Quigley confirms what others have denied for so long (some still); CPP higher (50%), rollout delayed min 1-3 years.

          These are the reasons review found S1 peak funding so high. Quigley confirms the numbers. You ignore or fail to comprehend the significance.

          • BS Richard, NBN Co published their audited accounts (by PWC and the ANAO no less) frequently as required to do so by law!

            Clown inc haven’t released a single audit report since the KM audit cleared the former NBN Co Mgmt/board of financial mismanagement!

          • @do wrong again. BTW I’m still awaiting for the audited corp plans (chuckles).

            Annual reports have always been audited and remain so. It is a legal requirement.

            Published actuals in AR showed the “bean counters” costs weren’t inline with CP predictions (denied by many). Confirmed now by Quigley himself. But then you’d need to know such things (called experience and education).

          • “BTW I’m still awaiting for the audited corp plans (chuckles).”

            Why don’t you just cherrypick the figures that suit MTM and make FttP look worse from the multiple Turnbull reviews and also use the CBA (that we must/should never trust…lol)..

            Oh wait

  5. Morrow said he didn’t want to comment on a paper that’s been written by someone who’s not as close to the detail or the facts

    Good. So this is official now. GimpCo can officially stop blaming someone who’s not as close to the detail or the “facts” for their own faults too.

  6. “Morrow said he didn’t “want to comment on a paper that’s been written by someone who’s not as close to the detail or the facts”. ”

    This mirrors what that toxic troll said last week. But Morrow has tried to take two contradictory positions with the same statement. He’s trying to say that Quigley doesn’t have all the facts, *but* what he’s saying is nothing new – that it is all stuff the NBN Co have already said. Which is exactly right – Quigley based his analysis on publicly available information released by NBN Co. They can’t have their cake and eat it too – either the data they’ve published is accurate, in which case Quigley’s analysis is correct, or the data is wrong, in which case they are deliberately misleading the public and the parliament. Where is the independent annual PWC audit? If it was good enough for NBN Co under Labor, why not now?

    You can’t dismiss Quigley’s analysis based on ‘lacking detail’ if the analysis he performed is accurate based on the detail that *is* available. That makes it correct. The analysis might change, of course, based on additional detail, but of you’re not willing to correct the record by providing that detail, then the existing analysis can’t be refuted.

    So which is it, Morrow & Co? Have you been fraudulent and misleading, publishing incorrect data? Or is the data accurate, and Quigley’s analysis correct? I suggest you choose carefully, because one of them is right, and no attempt to dissembling or avoid the question will change that fact.

    • “Morrow has tried to take two contradictory positions with the same statement…”

      That’s unfortunately the avenue all of the MTM, illogically ideological take…

  7. I’d be very interested to know what the terms of the contracts are with Telstra regardjng ongoing upkeep and access. Will NBN Co really need to maintain both networks and provide access to Telstra and Foster indefinitely? How much is that going to cost? If theoretically NBN Co went full FTTP and overbuilt the HFC, do they need to keep the HFC operating to appease Telstra and Foxtel based on a corrupt agreement written into a contract signed by people trying to put a permanent tap in public funds to siphon off into Telstra’s coffers?

    • Yes because as long as Foxtel sends a single signal down the wire we’ve agreed to maintain it for them.

      IF there’s a line fault or hint of one call NBN they will fix it for ‘free’! Also worth noting that the fact there’s a Cable TV signal on the line means its a lot less efficient for internet usage (ie similar deal with cross talk).

      • Then if Foxtel doesn’t want to use it it will be kept, maintained and upgraded for its primary role, high speed BB.

        • So we the taxpayers will have our taxes wasted on a private company until such time they move on… ?

          And then our taxes will continue to be wasted on it after they spit it out?

          Brilliant.

          • The original Telstra agreement did not require NBN Co to maintain Telstra’s HFC network for Foxtel, it merely paid Telstra to migrate their Broadband customers to the NBN Co FTTP network and discontinue using it for broadband.

          • Oh I see, so none of that $11B dollars being paid to Telstra by the Labor Government as per the agreement was to be used for HFC maintenance?

          • Telstra could do whatever the hell they liked with the 11 Billion – so what if they used it to maintain the HFC, it’s irrelevant!

          • “Oh I see, so none of that $11B dollars being paid to Telstra by the Labor Government as per the agreement was to be used for HFC maintenance?”

            See if you can spot the difference, alain.

            $11B do with it as you wish. But you are responsible for the maintenance costs (then).

            $11B do with it as you wish. But we will also pay your maintenance costs on top (now).

            Want a clue?

          • So in the end the source of maintenance dollars for HFC are the same, Government owned NBN Co funds or from the $11B Government funds paid to Telstra as payment for the 2011 agreement.

          • “So in the end the source of maintenance dollars for HFC are the same…”

            No… would you like another clue, alain?

            One has the HFC maintenance (and copper maintenance… ooh a new issue) within the $11B and the other is over and above the $11B.

            FttP was $11b. MTM is $11B plus, plus, plus, plus, plus, +, +, + for HFC and COPPER maintenance…

            Got it now? No?

            Perhaps we could find a five year old to draw you a picture and dumb it down to your level of childishness ;)

            The MTM shemozzle, fuck up is costing me and you and your precious tax dollars (well they were precious before, seems now they can be wasted willy nilly on retrograde BS) more for maintenance than FttP ever could…

            Got it “this time”? No I still thought not.

            Keep trying to FUD up everything alain, so as to deflect from the fact that NBN has admitted Quigley was right and err, YOU were/are wrong.

          • In fact let me rephrase that before the pedantically childish possibly out of the blue, actually respond…

            The initial $11B, avoided HC and copper maintenance entirely as FttP rightfully, bypassed and superseded obsolete copper and HFC.

            Whereas the new deal is $11B PLUS many further years of costly HFC and copper maintenance payments, from us the taxpayers over and above the $11B.

            With some suggesting it’s in excess of $1B p.a.

            I think that better reflects the situation.

    • UninvitedGuest,

      HFC is not going to be overbuilt by FTTP this time around but you might want to remember that Labor approved the use of HFC for Foxtel in the NBN Co/Telstra agreement back in the second half of 2011.

      So yes beyond ‘theoretically’ the HFC infrastructure was going to be overbuilt by Labor FTTP, but they wanted the BB capability to be eventually turned off to force HFC passed residences onto FTTP for BB, a ludicrous waste of existing infrastructure that was being maintained for Pay TV anyway and is capable of very high speed BB.

      The HFC infrastructure underpins the USA’s largest internet provider Comcast , and they are fast tracking their DOCSIS 3.1 upgrade for a 2016 release, no way are they overbuilding or replacing it with FTTP.

      • Is that the very same HFC you told us previously ‘failed”, which was then your subsequent reasoning as to why FttP would also fail (of course this was after telling us FttP couldn’t help but be successful, because it was a monopoly – got in strife from the powers for that admission I’ll bet, eh alain)?

        Is it also the same HFC you also told us that just hangs dormant/unwanted by consumers outside your place and is only good for the pigeons..? Again to suggest FttP would also be unwanted?

        Yes it is, I thought that was the very same HFC.

        But look now…more strange (and some may say completely dishonest) illogically ideological contradictions.

        ROFL

  8. Lets not forget the billions of dollars thrown to corporations to buy a network that was going to be scrapped at a loss. Where’s a Royal Commission when you actually need one, we need to get that money back and people need to be going to jail for arranging that corrupt deal.

    • I doubt we’ll get any money back (especially when there’s every indication that the blowout will keep tumbling after it hits the $15b mark considering how things have been run up until this point) but heads really need to roll for making this mess come to life, based on what was promised.

  9. $15 billion. The cost of keeping Malcolm Turnbull in Team Liberal? Will the judgment of the electorate be harsh/appropriate?

    Has Karina Keisler been counselled. Politicians and PR flacks should only have value if they are believed, but it does not seem fatal to their careers when they aren’t.

  10. Shouldn’t the title be “Quigley’s right: Morrow says $8bn NBN blowout “mostly” relates to MTM”.

    “We talked about the $8 billion cost that caused that … it mostly related to the two new technologies that we’re using,” he said.

    I know we’re probably going to blowout $15bn and beyond :) but did Morrow say that?

  11. My speeds a fortnight ago was 10.5 mbps, the Telstra crew came and worked on pit and pillar remediation across the road in preparation for NBN, speeds jumped to 13mbps. A thirty percent increase in download and a doubling of upload by just fixing the pit, shows how incompetent Telstra has been all these years of crap internet caused by their junk pits.

  12. That $15 billion would have been so much better spent on FttP. How many premises would it have paid for?

    Abbott and Turnbull never missed an opportunity to how expensive and wasteful Labor’s FttP was, and then they go and utterly waste enormous sums of money on ‘turning the ship around’ to a technically inferior, obsolete model.

    That kind of thinking deserves the slowest of slow claps……

    • using worst case figures and ignoring the continuing cost savings that have already been found, about 3.4 million premises passed and connected @ $4,400 per premises!

      • Derek O,

        How have you calculated that fixed figure from a estimated range of $5B-$15B?, poster klaw dropped the ‘up to $15B’, which is interesting as not one FTTP supporter has ever done that before.

        :)

          • So to be fair and give a balanced view point, what is the scenario at $5B, and how did you calculate those ‘worst case’ figures in the first place?

          • I also used the old $4,400 figure for FTTP – so using best case numbers ie 5 Billion dollar blow out and $2,400 per premises passed you get:

            2 Million extra FTTP premises passed!

            Happy now?

          • Yup in New Zealand Chorus started FTTH at $NZ3,500 in 2012
            2016 it is down to $NZ1,700 to $NZ1,770.

          • Derek O
            Another good one is you look at the worst case of $15B Blowout it adds another $1800 on top of the FTTN $1,600 and HFC $1,100 for the 8.5 million homes. FTTN $3,400 and HFC $2,900.
            Or if we look at Morrow Target of $8 blowout i add another $950

          • Jason K,

            ‘Another good one is you look at the worst case of $15B Blowout it adds another $1800 on top of the FTTN $1,600 and HFC $1,100 for the 8.5 million homes. FTTN $3,400 and HFC $2,900.’

            It is a good one, but you left out the FTTP figures (you must have forgot) so you need to add your $1800 to the $3700 brownfields and $2,100 greenfields figures, to get a proper fair and balanced comparison.

          • Lol Reality
            Good try but as morrow said the cost blow is the HFC and FTTN

            Even the CP16 FTTP premises covers % and cost are cheaper than the SR but according to you that’s a cost blowout. Lol.

            So the FTTN isn’t far off the cost of FTTP if it blows out to that full $15B.

          • Jason K,

            “Good try but as morrow said the cost blow is the HFC and FTTN”

            What, all the cost blowout range is HFC and FTTN, a portion of the cost blowout is HFC and FTTN, no portion of the blowout was due to FTTP, wireless, and satellite?

            Also link to what Morrow said about HFC and FTTN blowouts please.

            “Even the CP16 FTTP premises covers % and cost are cheaper than the SR but according to you that’s a cost blowout”

            What CP16 premises FTTP figure is cheaper (there are two) than SR and what SR figure are you referring to and what is SR anyway?

            “So the FTTN isn’t far off the cost of FTTP if it blows out to that full $15B.”

            But the blowout funding range estimate of $5-$15B is for all of the MTM model including FTTP, so in your fantasy FTTN has a blowout of $15B and FTTP, HFC, fixed wireless and satellite all have blowouts of zero.

          • Reality your such a laugh

            “What, all the cost blowout range is HFC and FTTN, a portion of the cost blowout is HFC and FTTN, no portion of the blowout was due to FTTP, wireless, and satellite?”
            FTTP Brownfields
            SR CP16
            $4,800 $4,400
            2.9m Premises 2.4m Premises
            FTTP Greenfields
            $3.4Bn $1.8Bn
            Satellite + Fixed Wireless
            $5.5Bn $3.6Bn
            .8m Premises 1.0m Premises
            Look at all that savings so no blowout there lol.

            “Also link to what Morrow said about HFC and FTTN blowouts please.”
            “We talked about the $8 billion cost that caused that … it mostly related to the two new technologies that we’re using,”

            So keep to your fantasy about FTTP the fault for the blowout when its FTTN and HFC. So again that up to $56B blowout is only $8B less than a full FTTP rollout very embarrassing.

        • Just because the range is estimated to be between $5-15b, how is it actually any better to say ‘up to’? The budget blowout is massive any way you look at it, and going by the last two years it’s entirely and easily conceivable that this ‘up to’ figure is a softball estimate anyway. It did come from current nbn, after all…

  13. Required funding blowout in the range $5-$15B, yes we know that.
    Blowout range due to MTM, well yeah that’s what the NBN Co are rolling out.
    Part of the blowout due to FTTN and HFC, yep understand that because they are part of the MTM, so is FTTP, fixed wireless and satellite, so they will contribute to the blowout as well.

    “However, asked point blank whether Quigley’s analysis was “right or wrong”, Morrow said he didn’t “want to comment on a paper that’s been written by someone who’s not as close to the detail or the facts”. “There’s nothing new out there today,” he added.”

    Yep, there sure is nothing new out there today.

    • I actually agree to a point alain…

      Of course you’d refuse to acknowledge what Morrow said, but that’s a given. So…

      …regadrless of the fact you blokes who refuse to let go of the past, forever desperately try to deflect from the present, the MTM present is just as woeful today as is was yesterday and will be tomorrow.

      Because Australia is still ridiculously rolling out idiotic, copper based, retrograde technology (there’s an oxymoron) which those who are even rolling it out, referred to as FRAUDBAND.

      Having seen huge hold-ups which make FttP’s small hold-ups look downright brilliant. UPTO (lol) $15B in blow outs (UPTO $56B – from claiming to have had a fully costed sub $30B plan) and in the end, a third rate, obsolete network, with costly add ons, to increase the speeds to speeds “we don’t even need” according to you lot.

      Brilliant… NOT

    • To not hold the current management to account on fund usage, in the same fashion as the prior, is disingenuous at best. Granted you have at least (in passing) noticed that spending has increased and potentially at least acknowledged it.

      Great.

      Politics exist and have played a heavy hand, however the reality (no pun intended) is that MTM is a costly exercise, regardless. It’s also required considerable expenditure because despite the polite spin from Morrow; the CAN is not in fantastic condition everywhere; the network was never designed for FTTN, so pillars and nodes require yet more investment to connect.

      The costs have changed and increased compared to estimates because said estimates were based on numbers pre-asset purchase. No one truly knew the cost – because we’ve not done this before.

      So yes, FTTH deployment ended up pushing the budget. Sometimes projects do. Estimates are just that. However efficiencies were also being found, methodologies improved. Costs were decreasing.

      I am sure over time, MTM will see similar efficiencies. Methodologies improved. Costs decreased. But this doesn’t mean they haven’t spiked. Ignoring it doesn’t make it any less relevant.

      But to continue the belligerent lie that all costs and overspending can be attributed to a party who haven’t been in power for 3 years and had no intention of deploying FTTN (I could call it fraudband, but then I’d just do the same thing you and Richard are doing – clinging tenaciously to the past to defend the future) is – well – it’s laughable.

      The models have changed. Estimates have changed. Costs have changed. Otherwise it’s just a circle jerk of myopic blame. And no-one learns a damned thing.

      • Brendan B,

        Fair enough comment, but I am certainly not clinging to FTTN regardless, and I certainly don’t consider it to be in the past, the past is ADSL.

        I am sure large Telco’s like BT in the UK still rolling FTTN out in 2015 and beyond with large scale trialing of G.Fast in place don’t consider it to be in the past either.

        To repeat a ‘labored’ point again the Labor FTTP to 93% by 2021 was ‘too ambitious’, not my words as you know, something had to give, if Labor had got back into Government in 2013 I think they would have reviewed their all FTTP model and have at least kept HFC for BB to try and curtail FTTP cost and speed up the rollout timeline.

        “The models have changed. Estimates have changed. Costs have changed.”

        Indeed they have, nothing to be gained by looking back and applying the ‘shoulda, woulda, coulda’ principle, the MTM as we know is current Government policy, they said they were going to roll out FTTN and use the HFC well before the election, and surprise surprise that’s what they are implementing.

        The next key milestone in the NBN saga where there is the first opportunity for actual change will have to wait until election 2016.

        What will Labor do if elected, for them it will be extremely difficult in regards to NBN policy, they have to be seen to be different but can they pull a somewhat tarnished FTTP rabbit out of the hat again and sell it to the electorate as a vote puller?

        • To repeat a ‘labored’ point again the Labor FTTP to 93% by 2021 was ‘too ambitious’

          BS Alain, Verizon passed 19 million premises in an 11 year roll-out, we only needed to pass 9 million max! The only thing ambitious about our roll-out was the early targets which did require revision!

          It’s about time you Liberal party supporters join the rest of us in the 21st century, the 20th century only ended ~15 years ago!

          • + 1

            I love the way these guys cling to an incumbent who owns copper trying to wring every last cent form their err, copper, as if that legitimizes it’s obsolescence…

            Bit like Kodak trying to wring every cent out of film/cameras, prior to the digital age. The analogy fits perfectly.

            Ah the ideologically illogical.

        • “I am sure large Telco’s like BT in the UK still rolling FTTN out in 2015 and beyond with large scale trialing of G.Fast in place don’t consider it to be in the past either.”

          Why are you confusing my statement on blaming the previous government, with a technology choice an incumbent has made, on incumbent owned hardware?

          NBNco isn’t the incumbent; they exist because the actual incumbent wasn’t forcibly separated, when it should have been. BT is interested in maximising a return from existing assets! That’s hardly surprising.

          “To repeat a ‘labored’ point again the Labor FTTP to.. [insert labours fault verbage here]

          You are blaming the prior Labor government, and FTTP, for a FTTN price change? I believe that exact definition of “clinging to the past to justify the future”.

          Don’t do it. Turnbull has his own sins. Hold him equally accountable. Otherwise it’s very much a myopic, “they did it first!” kindergarten logic.

          “The next key milestone in the NBN saga where there is the first opportunity for actual change will have to wait until election 2016.”

          Not really. There is no more political mileage in the NBN. As a political football, it is done. Labor will likely try to improve the fibre percentages again, if they win (and I don’t believe labor has a show in hell) but they are effectively now hamstrung.

          Fiddling at the edges. That’s about it.

          That which is most important now, is getting the network built. Making NBNco culpable and both it and the current government of the day (whomever that is) responsible for delivery.

          Poltical ideology aside, this thing needs to be built. Properly. Now. And you need to start holding the people in place, now, responsible. Otherwise they get a free pass to continue however they see fit, without consequences.

        • “To repeat a ‘labored’ point again the Labor FTTP to 93% by 2021 was ‘too ambitious’,”
          Yes, according to Liberal nbn predictions this rollout was going to be delayed by 2 years.

          Now of course the MTM is already confirmed to be delayed by 4 years, but that’s fine, right?

      • @ Brendan,

        I call it fraudband simply because the faithful here object to it.

        They object to it because they have no answer to the reality that the Coalition now rolling out fraudband, were the very people who opposed it and dubbed it fraudband in 2007.

        It has nothing to do with clinging to the past because fraudband is now…

  14. And meantime the NBN is in a position to where it needs to start to seek funding and financing as the Governments 29Bill will soon be running out.
    Considering the technology mess, incompetent management and board, high OPEX etc who will be the suckers to come up with the funds, or will the interest rates or penalties be in the exorbitant range and be called commercial in confidence, until NBN is bankrupt and sold at garage sale prices to the LNP’s mates and financial backers who will screw the consumer over mercilessly.

    Usual LNP economic excellence on show

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