news Founding NBN chief executive Mike Quigley this evening launched a devastating attack on the Coalition’s controversial Multi-Technology Mix model, using detailed analysis to show that the policy has set the NBN back years and resulted in cost blowouts to the tune of tens of billions of dollars.
Quigley — who led the NBN company from its foundation in 2009 through mid-2013 — spoke at an event at the University of Melbourne held jointly by the Telecommunications Society of Australia and the Melbourne Networked Society Institute. His detailed speech notes and associated slides can be downloaded here in PDF format.
Delimiter very much recommends readers take in the full speech; as it contains a vast amount more detail than was possible to provide in this article.
The executive’s central message for his audience was that the Fibre to the Premises technology which formed the core of Labor’s original NBN policy “was, and still is, the right answer for Australia’s fixed broadband needs”.
The Coalition substantially modified the NBN project away from that FTTP vision, integrating the legacy HFC cable and copper networks owned by Telstra and Optus.
Quigley firstly used a series of charts to show the NBN company’s progress in deploying its various technologies (FTTP, FTTN, HFC cable).
The company’s publicly disclosed progress, the executive said, showed squarely that when early rollout problems associated with contractors and asbestos in Telstra’s pits were resolved, the NBN FTTP rollout would have gone through the ‘ramp up’ required to be completed by its due date of 2022.
Quigley used the NBN company’s own progress in deploying FTTP under the Coalition to demonstrate this ramp up occurring, as the Coalition continued the FTTP rollout from 2013 while trying to get the FTTN and HFC cable technologies working.
“It is not hard to see what would have been possible if NBN Co’s attention had remained exclusively on FTTP for the Brownfields rollout,” he said.
“If after the asbestos problem had been resolved the focus had been on FTTP the quarterly volume could have recovered by the end of 2013. And it could have continued to increase from there – as it did later.”
“Just doubling the quarterly rate achieved in the June 2015 quarter would have meant the completion of all the Brownfields premises with FTTP and FTTB by the first half of 2022.”
In comparison, Quigley said, the Coalition had made almost no progress on the HFC aspect of the MTM policy. FTTN had also taken longer than expected, but Quigley acknowledged it was now ramping up rapidly.
The executive’s message in terms of the NBN project’s costs was similar.
Quigley charted the various cost projections that the Coalition had made with respect to Labor’s version of the NBN and its own policy, concluding that they bore no resemblance to reality.
“It is not surprising that people would have been convinced that a change to an MTM based NBN would save a lot of time and a lot of money,” he said.
“But as we now know, those original MTM estimates were a fiction. Within only a few months the estimated MTM costs had increased dramatically and the 25Mbps to every premise in Australia by the end of 2016 was abandoned. ”
“There were subsequently further large increases in costs so that by August 2015 the total funding for the MTM had risen to as high as $56 billion, with a target of $49 Billion. The build completion date is now end 2020.”
“And even that date is dependent on a very large increase in the build rate which is projected to start from July this year.”
In comparison, Quigley said, all of the available data showed that the cost of the original FTTP version of the NBN had stayed relatively stable, varying only between $43 billion and $45 billion, showing that most of the original assumptions for the FTTP version of the project had been bourne out.
Quigley said it was a “pity” that so much time and effort had been spent on trying to discredit and destroy the original FTTP based NBN plan.
“And equally a pity that the Coalition has put their faith in what has turned out to be a short-sighted, expensive and backward looking MTM plan based on copper,” he said.
“The nation is going to be bearing the consequences of those decisions for years to come in higher costs and poorer performance in an area that is critical to its long term future.”
“Betting tens of billions of taxpayers dollars at this time on copper access technologies, as the Coalition has done, is a huge miscalculation.”
Quigley pointed out that there was now no easy way back to the original NBN FTTP model, but that it was possible to modify the project in a positive way.
“While it is impossible to turn back the clock on the MTM it is still possible to make changes to the current direction, without introducing another major disruption,” he said. “Changes that will get us closer to building the right network for the long term.”
“It is becoming increasingly obvious, especially to end customers, that an NBN based on FTTP is a much better network than an MTM based NBN – from every angle – speed and capacity delivery, maintenance costs, reliability, longevity and upgrade costs.”
“An FTTP network would be a much more valuable public asset and could generate greater cash flows for the Government due to the lower maintenance, higher revenues and almost no upgrade costs. And it would be vastly superior in driving growth through the wider economy.”
“So it is a great pity that before making the shift to the MTM the Coalition did not heed the words of Tony Windsor – “do it right, do it once, do it with fibre”.”
I’ll publish a full analysis of Quigley’s comments tomorrow morning, but I want to say two things right up front about his speech, and the devastating associated presentation notes he has distributed.
Firstly, I just had my brain blown out of my ears by the former NBN CEO. I have been following the NBN debate for years now, but Quigley’s analysis today was the most damning critique of the MTM policy I have ever heard. Quigley has brought together a huge amount of information here and translated it so that, suddenly, so much about the NBN debate becomes so much clearer.
Secondly, it was amazing just listening to the man speak. His grasp of the economics and engineering of the NBN is clearly unsurpassed; but it’s also Quigley’s humility and humour that makes him the man he is.
Quigley has given so much to the Australian public, and continues to contribute. He is the very icon of what an engineer and an executive should be: Capable, knowledgable, but above all: Wise.
One can only hope that our politicians start listening to what such wise heads are telling them.