Credibility And The Alternate NBN

Today has seen the release of the long awaited, often touted Coalition alternative broadband policy to the current National Broadband Network (NBN) scheme.

In a press conference that became heated during questions, Malcolm Turnbull announced a $29.4 billion plan to provide FTTP for 22% of Australia, FTTN to 71%, LTE Wireless to 4% and Ka-band Satellite to 3%, as outlined in their detailed policy document:

Regardless of the merits – or otherwise – of this alternative plan, the very nature of how it was released means one must truly evaluate and question the credibility of the plan in political terms.

In the lead up to today’s launch, two articles appeared in the Daily Telegraph – one on Monday, and the other this morning.

Remarkable how one reporter managed to get two “exclusives” on the same subject on two consecutive days, isn’t it?

The writer didn’t even have the journalistic integrity to seek balance from the other side of the story with even a quote from the Communications Minister:

“It’s back to a campaign against the NBN Co, a campaign against the Government and the Daily Telegraph did not even seek comment from my office about these claims of $90 billion.”

It seems quite likely that these articles were plants to get the media talking about the subject once again, in preparation for today’s slick looking launch.

I think it is hard to argue that that is not the case – particularly since Turnbull himself has been setting up the “one third the cost” angle for some time:

“Q: What do you estimate would be the cost difference between deploying FTTN and FTTH?”

“A: Between one third and one quarter of FTTP by those building it.”

Remarkable then that $29 billion is almost exactly one third of $90 billion, isn’t it? I wonder how they calculated that figure?

Setting up the “facts” to suit the argument?

They have promised 25Mbps to everyone by the end of 2016 – that will leave them a little over two years to do all this – (including renegotiating all the existing contracts, redesigning the network, and actually building it) – as well as all the cost-benefits analyses they’ve promised.

Stretching it, to say the least.

But however you choose to view today’s policy release, one thing remains – the opposition claim that their version of the broadband network will be “cheaper” and delivered “faster” is false at worst, and dubious at best.

The current solution and their proposed solution don’t even have remotely the same technological outcome.

Making direct comparisons is like comparing apples with a bag of rusty nails.

They are completely different.

It’s $29.4 billion for a half-solution that will need to be upgraded at great expense later, or $37 billion for the same result without the later upgrade.

Further, $29.4 billion gives us 22% of people with fibre, or the existing version at $37 billion providing 93% of people with fibre – where are the economies in the smaller scale there?

That Turnbull has today even delivered a costed alternative policy also strains his credibility.

Last August, he claimed that he had a costed alternative policy “ready to go”, yet a month later he said that such a costed plan would not be possible, given he was unable to see the value and details of all the deals NBN Co had already entered into.

“Shadow Communications Minister Malcolm Turnbull has conceded that the Coalition will not reveal a fully-costed National Broadband Network (NBN) policy prior to the next Australian Federal election, because NBN Co has not disclosed the full cost of the existing contracts.”

Despite this information being on the public record – either in the NBN Co business plan, or subsequent media releases. It’s all out there.

By the time December came around, Turnbull was now pushing a figure of $15 billion for his alternative.

Care to recap?

In August a fully costed plan. In September, a fully costed plan was not possible. In December, at least a partial costing.

You can’t gain much credibility for your political narrative, when it changes from month to month.

Even today, it is now suddenly fully costed again – and fully costed at $29.4 billion. Even though he still hasn’t seen the NBN Co books he claimed he needed to be able to produce a fully costed alternative policy.

$15 billion? $29.4 billion?

What’s $14 billion between friends?

What are we supposed to believe here?

He even previously said his alternative plan wouldn’t be released prior to the election – yet here we are five months out, and there it is – another backflip.

The bottom line here is that the higher the opposition spin the cost of the current model, the more their policy will seem all warm and squishy in comparison.

It’s not technology, it’s politics – but there’s even holes in the technology.

When the first NBN plan was cancelled in 2009, in favour of the current FTTP model, Optus estimated 75,224 nodes would be required to offer a minimum of 12Mbps download speeds to 75% of the population.

This new plan is for 60,000 nodes to provide a minimum of 25Mbps, and while this isn’t necessarily impossible to achieve, it does mean you are pushing the existing copper network significantly harder than you are now, and every node has more services concentrated into it, which creates a greater chance of contention issues, user to user.

And those nodes? Would you want one of these bad boys outside your house?

Imagine all the objections to those.

Turnbull was even questioned today as to how long the copper network in the ground on which his solution depends would survive – he said “nobody knows”.

Actually, people do know about the state of Australia’s copper network, and it isn’t pretty. In 2003, Telstra described its network as “five minutes to midnight”:

“Former manager of regulatory strategy, Tony Warren, gave the Senate broadband inquiry details of the company’s problems with its ageing copper network. He said ADSL, the high-speed internet service that runs over copper wires, was the bridging broadband technology Telstra was using until it replaced the network. He described ADSL as the “last sweat” of revenue Telstra could wring out of the 100-year-old copper wire network.”

But most of all, when you add the $29.4 billion announced today, along with the $11 billion value of the Telstra agreement, and throw in the estimated $21 billion it would cost for a later upgrade to FTTP, an upgrade that even Turnbull agrees is required eventually, the Coalition may have just committed us to $61 billion of broadband expenditure to reach the same result the current plan would give us for $37 billion, and sooner.

Maintenance of the current copper network is estimated at around $1 billion per year, with expected savings of around $600 million per year by switching technologies – an amount Turnbull doesn’t believe is “material” in the debate.

The applications that require fibre speeds are already with us.

The benefits of a full FTTP network in only small areas of the economy alone are enough to fund the existing NBN:

TWEET: “@TonyWindsorMP: If FTTP keeps 5% of elderly people at home for extra year, that’s a saving of $60B over 10 yrs. Benefits of full fibre far outweigh costs.

The benefits of a full FTTP rollout are bountiful, and Coalition have a long history of contradictory messages on the subject, misrepresenting it’s success, and denying that people want it.

The Coalition wanted to offer an alternative broadband policy.

This barely qualifies as a like-for-like replacement right now – with many people already getting the kinds of speeds they are offering us for $29.4 billion.

It’s a joke, and Australia deserves so much better – and the existing NBN is already on the way.

  • Succinct and perfect in your summary, Michael.

    This column can now be cut and pasted onto the back of every how to vote card for Labor. Surely, the logic of the argument has a chance of winning the day in September?

    It was embarrassing to see the presentation today. Not a policy in sight, again. Merely more snide catch phrases and double-talk. Typically LNP, really.

    I would disagree with one of your assessments: “today’s slick looking launch”

    What I saw was an ill-conceived attempt at media professionalism. A hurriedly constructed presentation that (was obvious) MT hadn’t seen up close before. He fumbled with the controls of the tech and struggled in his use of it. Lighting was akin to a high school production, leaving TA in the dark for a great length of time (although, TA was in the dark, figuratively for a much greater portion of the morning). TA and MT often contradicted each other, and themselves once the Q&A began in earnest.

    What a poor showing from the LNP. Happy to see #fraudband is what it is known as now, as #fraudband is what it would be.

    Hopefully the next 6 months will see the population finally waking up to how good we have it now (mostly) and Labor will have the opportunity to get on with the job, at last.

    Great Read!

    • Have to agree with you on the media presentation. All flash, no sizzle. Fox medias attempt to help their buddies I am sure, and we all know Fox’s record.

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