news Communications Minister Mitch Fifield appears to have this afternoon inadvertently misled the Senate regarding the history of the Labor Party’s National Broadband Network policy, falsely alleging that the party had not considered re-using existing network infrastructure during the development of the policy.
This afternoon in Senate Question Time, Liberal Senator Linda Reynolds asked Fifield a ‘dorothy dixer’ question — a question designed to highlight the Government’s positive response to an issue. The issue appeared to be designed to allow Fifield to respond to a leaked document yesterday which appeared to show that Optus’ HFC cable network was unfit for use as part of the National Broadband Network.
In his response, Fifield said that before then-Communications Minister Stephen Conroy had embarked on what he described as the Labor Senator’s “fibre-only fantasy” (Labor’s FTTP version of the NBN), he had “failed to look around the world at what the broadband trends were”.
“He completely ignored the cost savings that were available from appropriately using existing infrastructure,” said Fifield.
The Minister alleged that Labor had completely “missed” what he said was a tech trend globally for using HFC cable networks to provide high-speed broadband. “They completely ignored the US, the world’s biggest cable broadband market, which boasts over $50 million subscribers and a growth rate that saw one million new subscriptions for the first quarter of 2015,” said Fifield.
The Liberal Senator said Conroy had only examined National Broadband Network policy in terms of “theology” rather than “technology”, implying that as Communications Minister, Conroy had been wedded to a vision for the NBN where only a Fibre to the Premises model would be acceptable.
“Senator Conroy has a belief system, and if he is the high priest of that belief system then I’m worried,” said Fifield.
However, Fifield’s comments appear to be at least partially inaccurate.
The NBN policy was initially conceived in mid-2007 as a policy explicitly re-using the copper network owned by Telstra. When Conroy became Communications Minister under the first Rudd administration in late November 2007, the Rudd administration started enacting a Fibre to the Node strategy for the NBN based on re-using Telstra’s existing infrastructure.
That model saw a number of major companies and conglomerates respond to an expressions of interest process to build the network. The mainstream industry discussion at the time focused around two network upgrade proposals — one from Telstra, and one from a group of rival telcos known as the ‘G9’.
However, at the time an expert panel found that none of the respondents were able to deliver on the plan. The key sticking point was Telstra, which filed a non-complying bid for the process.
At the time, Conroy had attempted to work with Telstra’s chief executive, Sol Trujillo and chairman Donald McGauchie. However, the Telstra management team proved extremely hostile to the Labor Government of the day and declined to move forward with an upgrade of its copper network due to the fact that the Government would have forced Telstra to open the network to wholesale access by its rivals.
At the time, Telstra only proceeded with the flagship ‘Next G’ upgrade of its mobile network because that upgrade would not be opened to wholesale competitive access.
In addition, at the time, HFC cable networks of the style owned by Telstra and Optus were not seen in the local or global industry as viable long-term infrastructure assets which could be opened to wholesale access and developed into high-speed broadband platforms that would be used over the long term. Global debate focused on the upgrade of copper-based networks to either Fibre to the Node or Fibre to the Premises.
Technological changes since that point have changed the discussion somewhat and generated renewed interest in HFC cable technology.
Further, as with its copper network, it is not clear that Telstra under Sol Trujillo would have allowed the Government to re-use its HFC cable infrastructure in an open access model.
Telstra’s hostility to the Government’s policy effectively forced the Rudd administration’s hand, leading to the Labor Government to attempt from 2009 — two years after it took office — to forcibly structurally separate Telstra’s retail and wholesale operations by overbuilding its copper network with a Fibre to the Premises model. This FTTP model was recommended by the Government’s panel of experts at the time.
Telstra’s attitude to the Government changed markedly under Trujillo and McGauchie’s successors, CEO David Thodey and Chair Catherine Livingstone. The company currently takes a highly cooperative approach to working with the Government — Coalition or Labor — that was not evident at all during Trujillo’s time leading Telstra.
Optus HFC cable
Separately, responding to the HFC cable issue, Fifield ridiculed what he said was the “fool’s gold” which Conroy and Shadow Communications Minister Jason Clare were “peddling” in their promotion of the leaked NBN document yesterday.
Fifield said the document only represented “the sort of planning that commercial organisations do, the sort of war gaming that they do, the sort of scenario testing which they do, which is entirely appropriate for an organisation”.
“They do this to look at worst case scenarios, best case scenarios and those in between,” he said. “That’s what that document represented.”
This is also the statement which has been made by the NBN company in relation to the document.
However, it is not clear at this point whether this is strictly accurate, with a number of senior NBN executives having put their names to the document, warning that the Optus HFC network had substantial problems which would lead to a blowout in costs if it was to be used for the NBN. The document also noted that the NBN company may need to overbuild large portions of the Optus network, due to its poor condition.
“HFC is very capable high-speed broadband technology,” said Fifield today. “Contrary to what those opposite have said, Optus is continuing to invest in its HFC assets in advance of the handover to NBN. NBN will invest further in HFC, with new technologies such as DOCSIS 3.1, which will allow for gigabit speeds.”
“We stand by our plan, we stand by NBN’s approach.”
Not many people recall that Labor was pro-FTTN for the first two years of the Rudd administration, or that then-CEO Sol Trujillo flatly forced Conroy and Rudd’s hands in refusing to upgrade its copper network. But I do. I was a journalist throughout that time — here’s my 2007 article on Labor’s first, $4.7 billion FTTN NBN policy. I would encourage today’s politicians to recall that Telstra was not always the meek kitten it appears to be today … and that it may also not be as compliant in future as the government of the day may wish.