Poor form: Fifield ignores direct questions about $641m NBN FTTN blowout, FTTP costs


news Communications Minister Mitch Fifield has refused to answer a direct question from a journalist about why the cost of remediating Telstra’s copper network has blown out by a factor of ten times to $641 million, saying that leaked internal NBN documents showing the figures had been “inappropriately obtained”.

On Sky News yesterday, Sky host David Lipson pointed out to Senator Fifield that in December 2013, then-Communications Minister Malcolm Turnbull had said the cost to repair Telstra’s copper network so it could be used for the National Broadband Network would be around $55 million.

A document has been leaked in the past week or so from the NBN that reveals it’s now blown out to some $640 million. Why is that and is that document correct?” asked Lipson. The full transcript of the interview is available online on Fifield’s ministerial website.

In his answer, Fifield did not directly answer Lipson’s question about why the blowout had occurred, and whether the document was correct.

The Minister acknowledged that several documents had recently leaked from the NBN company, stating that the documents had been “inappropriately obtained” and “cited selectively”.

“David the important point here is the NBN corporate plan which was released in August, updates NBN costs. It provides a range for peak funding of the NBN from $46 to $56 billion with a base case, or likely scenario, of $49 billion,” Fifield said. “Now those numbers take into account every bit of information, every bit of analysis that NBN has.”

“So the documents which have been leaked, there’s nothing in any of those documents that has not been taken into account by the corporate plan in August.”

Fifield also attempted to address the leak of a similar document several weeks ago which had appeared to show that the HFC cable network the NBN company bought from Optus for $800 million was not suitable for use as part of the NBN.

“I’ve also just got to quickly nail a few other falsehoods which have been put forward by Jason Clare,” said Fifield, referring to the Shadow Communications Minister.

“And they are that this Government paid $800 million to Optus for an HFC network that was not up to scratch. That is not the case, it’s actually the previous government that paid $800 million to Optus to shut down the HFC network. What Malcolm Turnbull said to Optus was ‘How about this, I don’t give you a single extra dollar but you let NBN access the HFC network’.”

“So it’s a complete and absolute falsehood that has been perpetrated and put forward by Jason Clare.”

However, Fifield’s statement appears to lack relevant context.

It is true that the previous Labor Government was to pay $800 million to Optus to shut down its HFC cable network. However, this move was taken to ensure the NBN company could quickly move Optus customers onto the new, technically superior Fibre to the Premises network the company was building to replace Optus’ infrastructure. This would help boost the NBN company’s early revenues.

Many industry commentators have historically viewed — and still view — HFC cable infrastructure as legacy and not worth upgrading, although others disagree. It is for this reason that the previous Labor Government was planning to replace the HFC cable and copper networks owned by Telstra and Optus. This would also have the net effect of structurally separating Telstra from its infrastructure and creating a level playing field for the rest of the industry.

Fifield also ignored a further question from Lipson. The Sky News host asked: “Is, though the cost of fibre to the premises coming down and will it continue to come down over time?”

“Well the NBN have a mandate to choose whatever technology will see the NBN rolled out fastest and at lowest cost,” Fifield responded. “It’s called the Multi-Technology-Mix approach. It’s a technology agnostic approach. That is what the NBN is doing. But there’s no doubt, there is no doubt, that the approach that the NBN is taking is significantly less expensive than a full fibre alternative. I’ll say again $30 billion extra cost. 6-8 years sooner. That’s $30 billion extra cost to go full fibre. And we’re going to be doing it 6-8 years sooner.”

Normally we see more sophisticated performances from Senator Fifield with regard to the NBN — I feel he has gotten a little lazy here. It’s not good form to completely ignore legitimate questions on national television about the National Broadband Network. Fifield really did not answer the questions that Lipson was asking.

Image credit: Parliamentary Broadcasting


  1. The cogs start to come undone for Fifield.
    I’m guessing nobody wants this communications portfolio as it seems to ruin whoever is in it.

    • What, conservatives unable to perform competently in a technology portfolio? Who could have predicted that?

  2. It is true, even if that document had been included in the Corporate Plan in August, and that explains why the cost blew out then, it doesn’t answer the question of “WHY” the costs for remediation of the copper have blown out from their costs in the SR to the current corporate plan.

    I guess ducking and weaving from answering questions is just an accepted response from the LNP/their supporters….

    • Took a page from Richards’ book it seems. He’s usually the first to point out that the blowout was known back in August, as if that somehow illegitimises questions being asked now.

  3. He was just about to say :
    “Well, look, the only way we could justify dropping Labors approach was to make wildly optimistic assumptions about the costs of using legacy infrastructure”
    but unfortunately he ran out of time in the interview.

  4. ‘What Malcolm Turnbull said to Optus was ‘How about this, I don’t give you a single extra dollar but you let NBN access the HFC network’.

    If Optus gave you something for nothing, that should have been a rather large hint as to its actual value.

    • Also means the Optus CEO/Directors have a lot of questions to answer to their shareholders.

      Unless, of course, there were some non-cash deals done between them and Malcolm…

      • From a shareholder perspective, what is the difference between being paid to decommission a fully written down ex-asset that is close to shifting into the liability column due to rising operational costs, or allowing someone else to take it over (therefore shifting the liability to them)? It’s win-win from Optus’s perspective.

        From NBN Co’s side, though, it is the difference between the cost-per-premises of rolling out FTTP and the cost-per-premises of:
        A) upgrading the HFC networks to accommodate *everyone* in the HFC zones (not just the fraction currently using it)
        B) the cost of integrating HFC into NBN Co’s IT management platform
        C) the cost of physically connecting every premises not currently connected
        D) the cost of remediation and then maintenance of HFC over the essentially non-existent cost of maintaining fibre
        Plus the difference in revenue resulting from HFC not being capable of the higher revenue plans that FTTP would have offered.

        So in one scenario NBN Co paid Optus 800m to decommission the HFC network, in another they paid 800m for the opportunity to acquire a 20yo network with much higher operating costs and lower revenue potential. Would the initial rollout prove to be more expensive for fibre than HFC? Probably, but remember, that’s not the end of the story, and the figures NBN Co are using to compare cost-per-premises for HFC are almost certainly deliberately leaving out costs like backend management integration – they’ll account for that elsewhere, which is completely dishonest, as the cost of HFC must necessarily include *all* the costs of choosing HFC instead of FTTP.

      • They weren’t paid by Labor to decommission the HFC, they were paid to transfer their customers. They could do whatever they wanted with the HFC after that, as long as it didn’t involve broadband.

        It was the same with the POTS and Telstra, except that also allowed NBNCo access to the pit’s and pipes, but they could do whatever they wanted with the actual copper system (once again, as long as it wasn’t for broadband).

        Given the deal between Labor and Optus/Telstra was already done, the deal the LNP (if it really was “not a cent more”) means those companies gifted assets to Malcolm, which is why they may have breached their fiduciary duties.

        I strongly suspect that while “not a cent more” changed hands, Malcolm worked out some kind of sweetener deal to get the actual wires.

        I hope one of the big papers actually has someone looking into that part of this whole thing, as those deals have remained secret “commercial in confidence” like most of the other dodgy LNP deals done.

  5. “It’s not good form to completely ignore legitimate questions on national television about the National Broadband Network. Fifield really did not answer the questions that Lipson was asking.”

    And on the flipside, Lipson let down his profession by not pressing the minister harder and allowing him to get away with disrespecting the question.

    I guess given that it was Sky News the minister believed he could easily get away with it – and did.

  6. Why should one family in one suburb enjoy FTTP while another resident, while paying the same price, has to deal with a potentially shitty FTTN service depending how far from the node they are?

        • Easy retort : I moved to a premises that was slated to get FTTP early 2014 but you canned it and now I’m getting shit again.

          If people even cared, a good portion could have started a class action probably.

  7. The communications minister has no interest in communication with anyone.

    I would like it if we could propose a vote of no confidence in this minister, and have him removed from his portfolio.

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