Our Prime Minister may have been factually inaccurate on 7:30 on NBN copper costs


news Prime Minister Malcolm Turnbull appears to have made a statement on national television which may have been factually inaccurate regarding the National Broadband Network, claiming on 7:30 tonight that the cost of remediating Telstra’s copper network was not ten times the amount originally estimated, despite evidence to the contrary.

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.

However, internal documents released by the Opposition last week showed that, by the NBN company’s own estimates, the cost of remediating Telstra’s network had blown out by a factor of ten from original expectations, to about $641 million, with the cost of rolling out infrastructure to each premise via Fibre to the Node having blown out from $600 to about $1600 per premise.

On the ABC’s 7:30 show tonight, Turnbull was asked directly about the issue in a broadcast which was primarily about the groundbreaking National Science and Innovation Agenda released by Turnbull this morning. We recommend you click here for the full interview (video and transcript). A transcript was also distributed by the Office of the Prime Minister.

Sales said, referring to the ‘innovation sector’: “Many people in that sector and other sectors would tell you the most critical thing for their business these days is a speedy internet – so why then do you continue to back a broadband network that relies on a decrepit copper network?”

“With great respect that is just completely wrong,” Turnbull responded.

Sales pressed Turnbull on the issue, noting that Telstra’s copper network was “old”.

In response, Turnbull said: “But it doesn’t matter whether it is old or young so long as it works. Under the approach we are taking to the NBN we will get the network completed six to eight years sooner than it would be under Labor’s proposed method – and $30 billion cheaper, or at less expense to the government, which makes broadband more affordable. It is remarkable, it doesn’t matter how many facts are presented by the company on this issue we still get the same assertions …”

Following this answer, Sales pressed the Prime Minister again on the issue, explicitly pointing out that there was a leak of internal NBN documents to The Australian newspaper last week (eventually made public by Labor) showing that “the copper network is in such poor shape that the company has to spend tenfold what the company had planned to spend to whip it into shape”.

Turnbull responded: “Well that’s simply not true.”

However, it is not clear that the Prime Minister is factually correct in his statement.

The leaked NBN documents (PDF) detail the fact that the NBN company believed, as at the production of its second Operating Plan, that its “Copper Remediation” costs had ballooned out from $2,685 per neighbourhood ‘node’ to $26,115 per node.

It is not precisely clear when the company’s second Operating Plan was produced, but it appears, according to the leaked document, that the NBN company produces about one per year. There are three plans listed in the document — the NBN company’s Strategic Review (published in November 2013), its first Operating Plan (IOP 1.1) and its second Operating Plan (IOP 2.0). The third IOP 2.0 plan lists the $26,115 per node copper remediation costs.

Following the release of the leaked document, the NBN company issued a statement refuting “the accuracy of claims made in today’s media”, but it never directly refuted the legitimacy of the leaked documents in question.

In that statement, the company stated that it was confident that its costs on a per-premise basis for its FTTN rollout were accurate as outlined in its August Corporate Plan. Those costs were $2,300 including the cost of leasing infrastructure from Telstra, or $1,600 based on capital expenditure claims alone. They can be found on page 67 (PDF). The IOP 2.0 listing in the leaked documents puts the figure at $1,375 per premise — not too dissimilar from the $1,600 flat capex figure listed in the August Corporate Plan.

The NBN company stated that “risks and mitigation plans” for its network were included in the August Corporate Plan, and its revised peak funding requirement at that date took these scenarios into account.

In short, according to the NBN company’s statement, it appears that the financial planning included in its August 2015 Corporate Plan includes the extra copper remediation cost revealed in the documents leaked last week.

But the August 2015 Corporate plan does not explicitly detail those costs on a per node basis, and the NBN company has not refuted the legitimacy of the documents leaked last week. This means that it appears that Prime Minister Turnbull may not have been correct when he stated that Sales’ assertion on 7:30 regarding the NBN company’s copper costs was “simply not true”.

Last week in the Senate, Communications Minister Mitch Fifield — a key Turnbull supporter and appointee — responded to similar questions about the cost of remediating Telstra’s copper network by reading out the NBN company’s statement verbatim.

Fifield followed up by claiming that the NBN document leaked this morning was “an early draft — an internal planning document”. He noted that the details contained in the document were “commercial in confidence” and that the final numbers concerned “may vary”.

It appears that the NBN company has refuted the claim that the $641 million in copper remediation costs were a “blow-out” compared with the August 2015 Corporate Plan. But I do not believe the company has refuted the headline claim that the cost of remediating Telstra’s copper is estimated at $641 million. It certainly has not provided an updated estimate.

I will be happy to update this article with statements from the Government or the NBN company on this issue, and happy to publicly admit if I have gotten calculations wrong here.

I am trying to be as diplomatic as possible here regarding our noble Prime Minister. But is it possible that he has not quite familiarised himself with the precise details of these NBN costs …?

Image credit: ABC, believed to be covered under Fair Dealing provisions


  1. In response, Turnbull said: “But it doesn’t matter whether it is old or young so long as it works. Under the approach we are taking to the NBN we will get the network completed six to eight years sooner than it would be under Labor’s proposed method – and $30 billion cheaper, or at less expense to the government, which makes broadband more affordable. It is remarkable, it doesn’t matter how many facts are presented by the company on this issue we still get the same assertions …”

    It is time to call a spade a bloody shovel…

    Turnbull is lying. NBN Co execs have acknowledged that the $30b cheaper and 8 years sooner was not for the previous plan, but if NBN Co turned stopped MTM and went back to FTTP.

    In other words, it is the direct cost of Turnbull’s arrogance and bloody minded stupidity coupled with a sycophantic executive and board.

    • I should have added, Turnbull can not plead ignorance on that matter either. He was one of the shareholder ministers that wrote to NBN Co asking them to cook up that counterfeit “counterfactual”.

      It also took NBN Co’s propaganda department 4 attempts to post an accurate blog about it, they kept having to edit it as their duplicitousness was exposed.

      • Imagine: having a worse reputation than Abbott or Howard!

        We demand a royal commission!!

        • Imagine: having a worse reputation than Abbott or Howard!

          Is that…like…even possible??

          Maybe someone should fire up something on change.org? Wouldn’t it be funny (/ironic) if an actual RC got up thanks to Delimiter commenters :o)

          • “6 to 8 years sooner”. if they didnt stuff around for 3 years it would be less than that now

      • Given your statement that “shareholder ministers that wrote to NBN Co asking them to cook up that counterfeit “counterfactual”.” have you got any evidence or are your allegation totally generated in your head? I know the writer of the blog doesn’t basis his statements on fact so I guess his followers can’t be expected. You are accusing Malcolm of fraud understand this statement you have made is admissible in court in a defamation case. I know you have no proof as this is not something that happen so I would retract your comment. I will be referring this to Malcolm legal team. Grow up and stop the I want. No matter what the system is it will be moth balled in the next few years anyway as people move on to mobile technology. In the next few years the data rates on mobile will crash as it looks like the three main carriers have finally got there ducks in a row. The fibre infrastructure investments currently being made will be beneficial in this new world as mobile infrastructure will be able to use them. The Copper will be dead and any other infrastructure going directly to homes. The cost of maintenance of any of the infrastructure is extremely high whether fibre or copper. Mobile infrastructure is a fraction of the cost.

  2. Turnbull may well be telling the truth.. albeit in his usual circumspect manner. His statement does not preclude the possibility it is now far more than a tenfold blow out. Equally he could mean 10.0 times is simply not true, {while thinking…it’s actually 10.43%}
    Perhaps that line of questioning should be pursued with NBN etc. It’s not tenfold? So what’s the current blowout precisely?

  3. Politicians have no reason to tell the truth. There is no downside from lying out your arse. There are no consequences. There are no votes to be lost because rusted-on tribal voters don’t care. Turnbull is just Abbott with a posh accent. Same policies. Same crap.

    • “Same policies. Same crap.”
      Remember who replaced Howard and was promptly booted when they had the audacity to stand up to his colleagues and suggest Labors ETS scheme wasn’t all crap?

      They replaced him with Abbott, whose inauguration speech included the line ‘we are the opposition. We will oppose’.

      Now, years after their reputation is shattered because of their greed in nearly every aspect a government can govern, they save face by booting Abbott and replacing him with someone who has some social skills and the ability to lie to a reporters face without stunning them with silence for minutes on end.

      And what was the outcome of the vote to boot Abbott? 53% in favour – so half the Liberals are still well happy with the mess they have conducted to date and the other half almost undoubtedly only gave Turnbull their assurances because he promised to tow the party line.

      “Same policies. Same crap.”
      Same party. Just a shinier clown nose.

  4. Turnbull has been blatantly lying about the NBN from the day he became shadow comms minister in opposition, so Renai why are you so surprised he’s still lying to the Australian public about it?

    • A bit confused as to why he repeatedly gives Turnbull the ‘benefit of the doubt’. Still waiting for the press pass to be processed or something?

  5. “Factually inaccurate”
    Still soft on Turnbull or worried about bullying legal action?

  6. The copper remediation costs were clearly underestimated in SR13. However the knowledge from trials was incorporated into the CPP in CP16. SR13 > CP16 MTM cost blowouts pointed out weeks ago by Quigley (in doing so also exposing the larger FTTH blowouts).

    Also not disputed is the CPP for FTTN is favourable when compared to FTTH.

    The frenzy of posts incorrectly assume the leaked document (p1 Updated 6 March 2015 ) is additional “blowout”.

    The document includes many useful numbers. The inability to comprehend them reflective of the general NBN policy discussion (e.g. $800m for Optus HFC network).

    A disastrous policy. The fixed line upgrade would be complete today if not for Labor’s insistence on fibre.

    • BS Richard, we’d have have at least FTTN back in 2003 if the Libs hadn’t sold Telstra off as a vertically integrated monopoly and wouldnt have neeeded an “NBN”, so quit your blame shifting and historical revisionism!

      and lets not forget, MtM is the plan that you admit you would have written!!!


    • What cost blow out with FTTP. From the SR to the CP16 is $1k cheaper.

      Or would like to take about the SR s2 or s4 vs what we are building now with a $10B I don’t know what it will cost? To have a quarter of the SR cost blowout with an I don’t know. Really shows how bad with what we are delivering now.

      You have claimed previously about its to deliver fast speed sooner but then the NBN is not required to do that. If there FTTN is so good at delivering a min 25Mbps or 50Mbps why is there no ISP in the offering that service. No even NBN offering that even though the SOE said for them to deliver “at least 25Mbps”. Or better yet BT speed guarantee is the fastest of there 2000 slowest customers.

    • “The frenzy of posts incorrectly assume the leaked document (p1 Updated 6 March 2015 ) is additional “blowout”.

      BS Richard. That is the claim being made by NBNCo and Turnbull, but it’s a straw man. People have been claiming that it is a blowout of the cost of copper remediation from the SR to the August CP, nothing more. Since there was no break down in the CP, it’s good to see some numbers on where those cost increases are. One is obviously the cost of copper remediation was grossly underestimated in the SR.

      “A disastrous policy. The fixed line upgrade would be complete today if not for Labor’s insistence on fibre.”

      Not complete. NBN phase 2 would be underway, upgrade to FTTH.

      • “Not complete. NBN phase 2 would be underway, upgrade to FTTH.”

        Apparently despite statements to the contrary from the Liberal party (aka Turnbull himself) fibre isn’t the end game, “high speed internet” is the end game.

        @Richard, still waiting for an answer on what “high speed” is.

        Since we have been told 25Mbit would be enough for everyone (Abbott), 15Mbit is enough (CBA), 25Mbit for 1 second in the day to RSPs (currently what nbn is guaranteeing to RSPs) or is it 50Mbit for 10 years after the network is complete (Morrow)?

        So, which is “high speed”? What was high speed 10 years ago is an absolute crawl today, and what is high speed now will be a crawl in 10 years time.

    • Richard. Something you always avoid is long term benefit vs cost.

      Why do you not take that into account. Is it better to build something now that is future proofed. Or buy something that may be cheaper in the short term, but will cost more to run, and will need to be upgraded in the future.

      Also what about the issues of Reliability. Or service standardisation.

      What fixed line upgrade? There was no fixed line upgrade planned. By anyone. The Howard Government tried, and failed to get movement on this. The Rudd government tried initially as well. But that initial plan of FTTN failed as well, because Telstra owned the infrastructure.

      Stop being purposefully obtuse. You KNOW that buying the CAN was a bad idea. I would love to see the accountant who would survive in private industry pushing for that shit.

      • As I said above, Richard believes the fixed line network wont need to be upgraded, copper will be fine for decades apparently.

        Or some fancy super future technology will come along to supersede it and we won’t need fibre at all.

        • Sadly its going to have to unless taxpayers will be asked to invest yet again into MTM Co once this mess is finished to build the real network. We’re going to have to wait until we’ve made a return on investing in a copper network we paid $11B+ for. I mean at least with HFC the capital investment was a lot lower so that portion should hopefully manage to pay itself off sooner.

          • One consideration is private industry finalises the last mile.
            If it is opened up a bit you might get some economies of scale for ISP’s or even 3rd parties to complete the Node to the House loop.

            Highly unlikely it would be opened up, and any private industry doing it would totally cherry pick the wealthy areas, but at least there is potential.

          • You mean a totally independent private company?

            Like one call “Digs ‘r Us” headed up by Morrow, Rue, Turnbull, Adcock and Rousselot?

            It’s about the only way I see Malcolm letting something like that happen…

      • As I have said before, I’m not certain that NBN(co) have purchased the CAN at all. The reason I say this is because they are unable to just sell the FTTN network to another party. Whoever buys the FTTN network will have to go through Telstra as well. Something I don’t quite understand is why Telstra would want this stipulation if the network is/was “five minutes to midnight” as they said it was some time ago. Why would they not just be happy to have just offloaded responsibility for the CAN to someone else?

        And, renai, if you’re listening, I would be interested to know if you can find out if the government negotiated for the sale of the CAN, or just for the right for NBN(co) to connect their equipment to it? When I really think about it, I really suspect it’s the latter and not the former, as I can’t see why Telstra would have any interest in who buys FTTN off the government unless they still actually own the CAN.

    • “The fixed line upgrade would be complete today if not for Labor’s insistence on fibre.”

      Absolutely baseless conjecture… or as Derek alluded to BS.

      • Yep would be nice for Richard to show where Telstra been rolling out FTTN before the NBN announcement.

        • In some ways they were, with their RIMs, it was essentially a form of FTTN utilising ADSL in the RIM. However, it wasn’t a solution they were planning on rolling out to everyone, it was just so they didn’t have to build new exchanges for small new developments.

          • Hmmm…. You should pay a visit to Bunbury sometime. There are RIMs everywhere. Though I’m not entirely sure why they deployed so many rims here. ALso, many of them are the older variety that have no ADSL equipment and also quite a few that aren’t even served by fibre, but just have a copper trunk running into them. I’m told most have fibre into them now though (would be the ones with tophats)…

          • @Jorl, Yeah, I am sure there are areas that have RIMs that aren’t serviced by fibre, I was just trying to let Jason know that Telstra were technically, at least at some point, rolling out a bastardised form of FTTN, even if it isn’t really comparable to current FTTN technology.

            (Tophats was the term that was not coming to mind when I was typing the original reply xD)

          • Yes but R0 according to Richard Telstra was already rolling out FTTN with vdsl because he claimed we would have had it by now if it wasn’t for the 2007 policy FTTN. I would just would like him the show an example of where the market had not failed. Becuase any rollout that he can claim is either Openetworks for there FTTP in greenfield or there FTTB or transact FTTN.

          • @Tinman,

            I used the word bastardised form, because they were using ADSL2+ within the cabinets.

            When for years before it, Japan had been using VDSL over copper and had FTTP too.

          • @R0ninX3ph

            No worries. Was just pointing out that FTTN uses any form of xDSL, the fact that Telstra used the lowest one just shows how much they love screwing us over to maximise profits.

  7. “is it possible that he has not quite familiarised himself with the precise details of these NBN costs …?”
    No, no it isn’t. Occam’s Razor shows us that the simplest answer is the most likely. It is beyond reason to think that Turnbull would not be across the detail – he’s the man that’s spent his career talking about logic, facts and reasoned argument. Even when he has flown in the face of the evidence, that’s not because he hasn’t been aware of the facts, quite the opposite – he understood them extremely well so that he could misrepresent them and misdirect the argument.

    No, the simplest and most likely reality is that Turnbull is sticking to his narrative, not giving the slightest bit of ground. The problem with that strategy is that it’s, well, false. Turnbull is undermining his own credibility. When the Prime Minister speaks you should have reasonable confidence that they aren’t being self serving you deceptive and outright dishonest. Turnbull’s demonstrating that he’s perfectly happy to misrepresent the facts and mislead the public when it is politically advantageous (or the facts he doesn’t want to admit are politically inconvenient). Noble PM? Dishonest Malcolm is anything but noble.

  8. The heading of the article should be “Our Prime Minister may not be completely honest and upfront on the costs of the NBN and the copper.”

    Maybe they are denying that this isn’t a blowout because they knew it was going to cost this much but the figures provided in all the documents so far were fudged to make the MTM seem cheaper. Government knows the word “blowout” isn’t going to go down with the public very favourably. Obviously they are not going to admit to being aware of the costs being as high or even higher as it has been claimed in the recent articles. Turnbull is trying to sell his MTM after all and it wouldn’t sell very well with the public if he was telling the truth. It seems that all Turnbull is doing is denying what has been claimed but never actually providing any evidence or an update with proper figures when questioned. When the Government and NBNCo constantly reject or respond to claims with ambiguity and no evidence, you know they are lying. The usual responses are “completely wrong”, “not true”, “sooner”, “cheaper”, “may vary”, “Labor’s fault”. If we haven’t got any updates on costs, it is because the Government is busy trying to figure out how they are going fudge it. This doesn’t seem any better than Labor’s back of the napkin plan but somehow the Liberals seem to think that it is.

    “But it doesn’t matter whether it is old or young so long as it works.” Yeah it works for now but it will become obsolete and fail in less time than it took to build.

  9. “But it doesn’t matter whether it is old or young so long as it works.”

    Actually it matters a whole damn lot because its called return on investment. The older something is the less likely it is to last and if it doesn’t last long enough (or say needs to be replaced asap) to get a return on it then there are serious issues.

    Now that doesn’t matter if you don’t buy the damn thing in the first place and just invest in the upgrade because you own it and its paid itself off already (greatly reduces the underlying investment you need a return on).

  10. “commercial in confidence”

    Wake up Australia.

    There is a reason the L/NP constantly cite things like that (and “on water matters”, etc, etc, etc) and it is not because they are dealing fairly with you…

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