Budde says he warned Turnbull about Optus HFC cable issue


news Veteran telecommunications analyst Paul Budde late last week said he publicly warned Malcolm Turnbull that the HFC cable network which the NBN company bought from Optus for $800 million was not suitable for use as part of the National Broadband Network, but that the Prime Minister had ignored the analysis, surrounding himself instead with “yes men”.

Under Labor’s previous near-universal Fibre to the Premises model for the NBN, the HFC cable and copper networks owned by Telstra and Optus would have been shut down. However, the Coalition’s Multi-Technology Mix plan instituted by Malcolm Turnbull as Communications Minister in the Abbott administration is seeing them acquired and upgraded by the NBN company. In Optus’ case, the network buy came at a cost of some $800 million.

However, internal documents leaked last week appeared to reveal that the NBN company was considering overbuilding the Optus HFC cable network, in a move which appeared to dramatically validate long-standing criticism that the HFC cable technology could not meet Australia’s future broadband needs. The NBN company has stated that the documents represent only a ‘hypothetical’ scenario.

In a blog post published late last week (we recommend you click here for the full article), Budde says he publicly warned about the issue.

“Specifically in relation to the HFC I mentioned that both the Optus and Telstra networks were developed in the early and mid-1990s, and abandoned soon after that as being non-viable broadband infrastructure for the future,” Budde wrote.

“Optus had wanted to use this infrastructure to make a quantum leap into broadband, but Telstra successfully overbuilt the Optus network and in the process killed Optus’s business model. Since this was Telstra’s aim its job was done and it paid very little attention to its HFC network for the next 15 years; and Optus’s HFC strategy was gravely wounded in the battle and its HFC service only limped on from there.”

Budde has indeed publicly written about the perils of re-using the HFC cable networks on a number of occasions.

For example, in February 2013, the analyst published a strongly worded blog post arguing that the HFC cable networks focused on by the Coalition in its rival NBN policy were akin to steam trains in the 1930’s through the 1960’s — they would still be around for decades, but didn’t represent the future of their industry.

“Good quality HFC and VDSL2+ networks could possibly survive for 10 to 20 years. The problem is that there are only a limited number of areas where this is technically possible or economically viable,” wrote Budde at the time.

Last week, Budde added that Turnbull had fallen into the trap as Communications Minister of surrounding himself with “yes men” who “went along with anything he said”.

“While I can understand the political situation the Minister was in at the time, if he had truly had the interest of the nation in mind he could have formulated policies that would have retained the FttH as the end goal of the NBN – he has mentioned to me on several occasions that he agrees with this,” wrote Budde.

“To my surprise, however, he stubbornly followed his ideas regarding a multi-technology mix.”


      • Noticed the “experts” he has that support him? Not those with a technical background, it’s the ass kissing conference leeches.

    • Actually, he is wrong.

      HFC was not abandoned because of not being future proof, it was abandoned because local councils started wanting too much money for access to pits in order to expand the network, so it was abandoned.

      Optus HFC is not fit for purpose, because OPTUS failed in maintaining the network.

  1. Renai, has the remediation cost of the Telstra HFC also been calculated?

    If the Optus HFC is $1.3 billion to buy and refurbish (to gleaming new 1990s standards), and Telstra’s HFC across the street is about the same, having an identical suburban footprint, does that mean we are spending $3 billion on HFC, only to overbuild at extra cost in a few years?

    • Then there is the Telstra traditional copper which is even older. And there is much more of it and Malcolm paid much more for it.

      • As much as I am a supporter of FTTP and the previous 93% FTTP rollout plan, people need to stop trotting out the lie that the LNP have “paid money for things”.

        Under the original plan, Optus were getting $800m for shutting down their HFC, and Telstra $11bn for shutting down both the copper and HFC networks, under the LNP, nbn has bought them for the exact same price.

        If you then want to talk about maintenance? Fine. But we need to stop saying “the LNP have spent $11bn on a copper network!!!!11!!eventyone!” because Labor was paying the same, and getting nothing but customers in return.

        • Customers that had access to the high end plans that would have paid for the network versus endless maintenance costs on a network that can only support most people on lower tier plans. Hmm, seems like an identical deal to me…

          • I never said it was identical, I am simply saying we need people to stop saying “The LNP are spending $11bn on buying the copper from Telstra!!!” when Labor were already spending said amount.

            As I said, if you want to talk about maintenance costs associated? Fine, go for it. But we need to stop claiming that the LNP is blowing $11bn on the copper network and HFC, when Labor were spending the same money to decommission it.

          • OK, to reword : A plan that provided guaranteed income versus a plan that guaranteed expenditure and lowered income.

            It is absolutely not fair to claim that the deals were comparable.

          • Hotcakes,

            “Customers that had access to the high end plans that would have paid for the network”

            Except that’s not what NBN FTTP customers are doing, never mind it sounded good.

          • @ alain.

            Ever thought of taking a rudimentary English course, just so that your gibberish may at least make minimal sense…

            Just sayin’

          • @r0 you are correct. The new mgmt renegotiated the old contracts to acquire the old networks for nothing, zip, zilch.

            Welcome to squealing if you post anything not 100% supportive of the fanboy position.

  2. Budde, one of the biggest fibre advocates going, wrote a blog post. Why didn’t they listen?;-)

    See the $800 paid for HFC untruth is still being written. Question: how much are they paying to migrate customers in the deal?

    • Budde, one of the biggest fibre advocates going, wrote a blog post. Why didn’t they listen?;-)

      yeah, I know right? They should listen to Richard who when not counting cars and beans comments in articles about blog posts and has it ALL figured out.

      • @hc counting cars? Perhaps a link to this claim (none to support previous ones)? Don’t worry it doesn’t exist; another fabrication.

        Help us out with the optus payment to migrate at least.

        • @hc counting cars?

          You got me Richard. I cant remember. I’m sure I don’t care enough about what you were actually counting at beomix (besides beans). Point was it turned out to be irrelevant to the debate despite your constant blustering.

          (none to support previous ones)?

          Link was posted in the other article twice as you requested. Please pay attention in the future.

          • @hc brisbane line, car counting, uncritical of coalition policy, 25mbps all required, risks borne by taxpayer “fail”, or $800m for HFC.

            Link provided (at least twice) disproves your claim (called out at least twice); hundreds of posts I thought you’d have at least one. None of it matters, make up whatever. The fanboy way.

          • You still seem to think your point about “Govt should be out of broadband” nullifies your endorsement of the failed GimpCo policy. Hint: It doesn’t.

            Still going on about a “brisbane line” post I had nothing do do with and still no explanation as to how it applies to me but your whole comment seems very gibberish with no real coherence. Are you drunk tonight or are you being more vague than usual because your contradictions were exposed in the other article?

          • Wow HC,

            You posted two comments elsewhere from our friend, which completely contradict each other, in relation to future technologies not able/easily able…LOL and this is the childish retort?

            I actually though higher of Richard than the other MTM minions here, but…

            Brisbane line from someone else WTF is that about? Is someone else’s comment being used against you? Shows the desperation and lack of substance.

            Uncritical of Coalition policy – yes uncritical, exactly. “But”, now that MTM is falling apart, as we said it would, he’s becoming a little critical (think Syd being critical of Telstra), to distance himself from the ” could have been commissioned to write it comment”, Tsk tsk.

            Car counting – well I must be mistaken too, because I seem to recall Beomix being involved in vehicle counting/detection hardware or software of some description.

            Weren’t Beomix involved in this, in some sort of capacity Richard?

            However, I note with interest, Richard again asks for a link to prove it, lol… so that even when supplied like his “commissioned to” comment staring him in the face, he’d still deny it anyway?

            But having done a 30 second Google I can’t find Beomix at all now… perhaps with such foresight in management they went bust…LOL

            Did you insist on reusing the existing typewriters instead of purchasing PC’s Richard… FTW

          • No bites HC… right oh, let him off the hook now…?

            We both know it was traffic as in people traffic – so no more yanking his chain for comedy value.


          • You probably right Rizz, it may have been people traffic, I think I recall something about parked cars too but whatever. He can count toothpicks for all I care :-)

          • @all In a different timezone (duh).

            “Thanks for the insight [brisbane line] Abel, you know what they say “Those who don’t know history are doomed to repeat it.” Always good to learn something new about Australian history even if it is on a tech website.”

            A diminishing number of us consider learning wrong information is actually worse.

            Right Alex, everything wrong is a ruse rather than stupidity.

            Sticking with inane “Fail” posts limits the attack surface (though does expose you as juvenile – most here won’t notice).

            Googles the wrong company then claims they’ve gone bust because she couldn’t find it. Thereby confirming the entire thread.

          • Are you still not going to provide a link to this post to provide context?

            I do vaguely recall that comment of mine now but I am at a loss as how it applies to anything here or about the NBN. Since it largely had nothing to do with the NBN it was forgettable. History and Australian history is not my thing but am happy to learn new things about it just as I said there.

            So what is the problem exactly? Maybe Abel said something you took exception to but rather than take it up with him you decided to bug me about it years later because I said “Always good to learn something new etc” in regards to what he said?

            Is that a reasonable summary of the events?

          • Oh please Richard speaking of stupidity…LOL

            I knew the name of your quaint little company FFS, it was right there for all to see on ZD, from the initial correspondences we had and HC linked to…der…

            But following your last sob session, about naming you etc, I was waiting for you to spill your guts rather than have you whinge we’d invaded your privacy or whatever you whined about last time…

            Remember last time you asked and when HC supplied, it included your full name (which YOU put there) so to deflect from your own ridiculous initial comment and current denials that those comments existed (even when right there for all to see), instead you whined about your name being posted…

            Surely even you can see it now… no…LOL

            Damned if you do/don’t with the lunatic fringe rad cons…

            Anyway, you disappeared like a ninja with the runs, when HC posted these two gem comments. from you..

            Richard 24th September 2012: technology future over such long timelines too uncertain.

            Richard 26th November 2015: Improvements in copper and cable technologies were entirely predictable at the time (as are continual future improvements).

            Please explain your complete ridiculous contradictions here?

            Then when you are done, what about these, I referred to in the same thread…

            You have told us government should steer clear of communications, as markets will always deliver the best outcome haven’t you…?

            But then you refer to “priority for areas where market failed”

            So while you are on a BS roll, please attempt to explain this too.

            Thank you, I look forward to either more *crickets* or some out there idiocy… perhaps you can blame Abel AGAIN…

          • HC I think we have just found a truthful and factual comment from Richard at last…

            Richard just admitted he’s “In a different timezone”.

            Yes we know Richard, we are here, now, in 2015 looking to the future…you are still living in your 1950’s bubble and looking backwards…

            Thank you.

          • Right Alex, everything wrong is a ruse rather than stupidity.

            Not caring enough to remember what you counted is not stupidity but your desperation to classify it as such is.

          • @hc The brisbane line never happened, it was a concoction of the left. Leftoids fall for it because no matter how preposterous (and in that case disgusting) the claim it played to their bias and ignorance.

            Much of what is repeated here is little different (though not disgusting, it’s only internet). Strawmen assembled and repeated without foundation: Optus HFC is not costing $800m to acquire, I’ve not been uncritical of the coalitions NBN policy or MTM, I’m not paid to post, …

            Your claim re coalition NBN policy is not only unsupported but demonstratively false. Rather correcting it, the squealleading squad double-down by making up even more. Alex going even further and drawing conclusions from his fabrications. Nothing new, brisbane line post nicely encapsulates it.

          • @ Richard.

            Oh I see like the $667B debt that never and doesn’t exist?

            But it’s a bit low attacking a person who isn’t here, don’t you think?

            Regardless since you ignored it yet again…

            Please feel free to explain your contradictions…outlined…


          • @alex Is english your first langauge?

            There is no contradiction between the two quotes. You can’t see the difference between overbuilding with fibre and reusing copper with improving speeds (but magnitude uncertain) but much lower capex.

            Same as it’s almost as if I was commissioned to write something becomes i could have written it (including costs and timelines). Best remains the obsolete redefinition; a network generating millions.

            You keep squealing 1950’s, reinforcing you have no idea. But few gloat about their lack of qualifications/knowledge in a debate, seeing it as a positive.

          • @hc The brisbane line never happened, it was a concoction of the left

            Once again take it up with Abel. I’m not a history buff as mentioned already. This is a discussion you should have with him not me (and still no link to provide context to my comment)

            Your claim re coalition NBN policy is not only unsupported but demonstratively false.

            You endorsed the coalition clowns policy. That was my claim. That has been demonstrated.

            Alex going even further and drawing conclusions from his fabrications. None new, brisbane line post nicely encapsulates it.

            Perfectly acceptable for you to draw conclusions from your own fabrications though. Indeed, it’s nothing new.

          • Yes it is Richard ever thought of trying to learn it yourself?

            Even if just to learn to stop moronically contradicting yourself and then trying to squirm out of it.

            My goodness how many times is this now you have said one thing then the opposite and when quizzed, you talk complete rubbish in a lame attempt to escape your own stupidity?

            Why not just man up… even only once, it won’t hurt?

            By the way I see you managed to skip the markets delivering/ not delivering… which in rad con terms I’m sure also means the same thing (move goal posts….. now)…*sigh*.

            “The radical of one century is the conservative of the next. The radical invents the views. When he has worn them out the conservative adopts them.”

            Mark Twain obviously must have known you Richard.

    • Budde is one of the biggest fibre advocates going… so why didn’t Mal have him on his panel to try to offset Ergas and his team of ultra-cons stupidity… oh that’s right.

      But err yes again, he is a fibre advocate… because being an expert in his field (i.e. not some bean counter with tickets on himself, an actual expert)… who like most here is not weighed down by stupid political subservience, he and we don’t have to appease the ideology and can support what’s best for Australia not best for a political entity.

      Interestingly Richard, Budde was always a fibre advocate, long before the NBN and remains so… so what does this tell you. Had the Libs jumped on the FttP boat, he’d have supported their FttP too, I’m pretty certain.

      Ironically, as I and lo and behold, I’m sure even you, would have too…

      Ooh in relation to HFC, how much are they now paying over and above the $800m for a network which is, err isn’t, umm is again (until tomorrow) fit for use, in relation to upgrades, maintenance and not to mention possible overbuilds…?

      • @alex when you only see fibre, the solution is always fibre. His post says the same thing; he sees overbuilding fibre as the end point. I don’t and never have. Even if overbuilding in stages has many advantages and can cost less (discussed many times); if NBNCo had’ve used the HFC networks another 2.5+m premises would be connected today, if Conroy hadn’t threatened Telstra this could have been done with zero taxpayer dollars.

        CPP for HFC may be climbing but not even close to FTTH (1/3 ouch).

        They didn’t pay $800m for the Optus HFC network. C’mon at least acknowledge this BS.

        If NBNCo didn’t use it (today again saying they will and trial very positive) the cost is zero (from what JK posted of the Telstra deal), if they do they get ownership of the existing infrastructure for nothing (zero, zilch,zip). Upgrades for CMTS already provided, interference the big question.

        • And when you only see the use of existing (obsolete) infrastructure, the solution is always, existing obsolete infrastructure.

          Why weren’t the iron wires good enough Richard?

          Oh the cost (yes the fastly inflating cost of MTM). But again Richard, where’s the B, in cBa… FFS. Remember that link you accidentally posted (d’oh) showing increases in broadband speed leading to increased GDP?

          But since you are bogged down in bean counter COST only, comparatively, looking at the Sydney Opera House which blew out (largely because the guess who conservatives held back monies and tried to fuck up the build – perhaps like they are doing to the NBN now) would you now argue that it was a bad idea?

          You know like considering it’s an iconic landmark which has repaid itself probably 1000 fold in tourism etc?

          You see Richard you will look at the Opera House and say, oh well it’s ok to say that now in hindsight… But no Richard.. that isn’t hindsight after the fact, that’s foresight before the fact, much like FttP could have been…

          Sadly something, ultra-conservative, by the book bean counters, simply can’t grasp.

        • We didn’t own the CAN, and Telstra(who owned it) was being problematic, and had been for several years prior, across 2 governments. (And lets face it, the only reason they came to the table at all was because they were being overbuilt)

          Wireless doesn’t scale.
          Satellite doesn’t scale cheaply, and has latency issues.

          So the decision became we have to build a network.

          If you are building a network from scratch(remember we didn’t have the CAN).
          What do you choose to build? Surely an accountant such as yourself can see the value in building with a technology that is A) cheaper to maintain, B) provides for greater speed benefits and therefore higher revenue, C) is pretty much the world wide standard for building networks from scratch.

          • Yes but when you add unmovable ultra-conservative politics/ideology to the mix… well you see it out trumps everything else, to such people :(

          • Woolfe,

            ” A) cheaper to maintain,”

            Well if you are an accountant you don’t just discuss maintenance in isolation unless you want to introduce accounting bias towards FTTP, you need to discuss CAPEX CPP figures and deployment speed as well.

            ” B) provides for greater speed benefits and therefore higher revenue,”

            Pity the vast majority of customers on FTTP plans in Australia DON’T subscribe to the higher speed plan then eh?

            “C) is pretty much the world wide standard for building networks from scratch.”

            True, that’s why FTTP is the Coalition MTM model for new greenfields estates building infrastucture from scratch, and where you don’t have to build from scratch it is cost effective to utilise existing infrastructure.

          • Well you answer alain/Reality…

            Would new FttP be cheaper to maintain than old copper & HFC? Not to mention the upgrades required to copper and HFC and the extra power requirements of FttN…

            Regardless of the fact you desperately need to avoid talk of very costly OPEX regarding MTM, it is part of the financial equation.

            I look forward to *crickets* or a childish, we’ll never know because FttP to 93% was stopped…to avoid the bleedin’ obvious.

          • RS,

            Key figures are missing from your argument but plenty of useless discussion about crickets, which I assume is the sound when you cannot provide supporting figures.

            So what is the OPEX + CAPEX comparisons?

            HFC, FTTN and FTTP that puts FTTP easily in front.

            Go for it.

          • Oh alain, the undisputed king of Delimiter bannings (for obvious reasons)…

            NO figures are missing, because I asked YOU a simple question.

            So, you answer my simple question and then I will address your question.

            Got it now? It’s not rocket science (well it may be for you).

            I now await your, typically evasive and childish response to avoid answering…

        • When it comes to brownfields FTTP CPP comparisons with HFC and FTTN the ‘Back to 2013 FTTP’ brigade shove their fingers in their ears and shout la-la-la as loudly as possible while placing DETOUR THIS WAY signs at every posting opportunity.

          Denial underpins the FTTP argument, especially denial of what actually happened under six years of Labor.

          • Back to 2013 brigade, says the first person to always go back to 2013 (how ironic) to deflect from the Coalition’s abysmal MTM….

            Yes I said Coalition’s because I know that hurts a bit more than NBN’s MTM…

            You’re welcome.

          • …. as I said it helps to deny that CPP fixed line comparisons exist, coupled with the denial of the Labor years and their failed NBN six year rollout, makes for simplistic pro FTTP argument indeed.

            Apparently if FTTP was resurrected from the dead in 2016 and reluctantly kicked into action 2017-2018 (I wonder if Labor will take fours years to evaluate and trial it again) will make everything ok again.

            Except it was never anywhere near ok the first time around.

          • Are you warping back to the past again… i thought so…

            This is the rare GOLD hypocrisy, only found here at Delimiter C/o alain & Co…

  3. Optus were planning to dismantle HFC by next year in replace for fibre therefore the fibre rollout should have well and truly started.

    They don’t maintain their network, and it’s congested and full of faults.

    this is Liberal ideology for you just to avoid Labor’s fibre plan.

  4. Budde is such an irrelevance to this debate. He’s a well known fibre zealot who has no concept of economics or business cases. Like his mate Gregory the academic, if either of them had any talent they would be working in the industry rather than squealing from the sidelines. (Budde reckons he consults but can anyone name who he’s consulted for and on what projects?)

    • Budde is a respected Telco analyst who calls a spade a spade no matter the Colour of the Government, unlike Kevin Morgan and Graeme Lynch who are both regarded by most in the ICT industry as partisan hacks.

      • “unlike Kevin Morgan and Graeme Lynch who are both regarded by most in the ICT industry as partisan hacks.”


        Of course it goes without saying anyone who supports FTTP is a ‘expert’ anyone that doesn’t is a partisan hack.

        Life is so simple for the ‘Back to 2013 NBN’ band of brothers.

        • @Alain, not conjecture at all, I’ve worked in the ICT industry for years and that is the prevailing opinion of those two.

          I’ve had informal NBN discussions with Telstra GM’s who dont understand why TurnBull/Fifield are still pushing the FTTN barrow. When even Telstra GM’s think that horse has well and truly bolted, you have a problem!

          • @Rizz “I’ve worked in the ICT industry for years and that is the prevailing opinion of those two.”

            So have I, I have never ever heard that.

            “I’ve had informal NBN discussions with Telstra GM’s who dont understand why TurnBull/Fifield are still pushing the FTTN barrow.”

            ‘informal’ lol, yeah sure you have Alex.

          • A/ Clearly you havent been working in the right areas then Alain.

            B/ I’m not Alex, never have been.

          • Don’t worry about it Derek…

            If he is so easily confused by you and I, it’s no wonder he is completely stumped by the big picture items such as FttP.

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