Hangout with Turnbull and Conroy on ZDNet
OurSay and ZDNet partnered to bring you a communications debate between Communications Minister Stephen Conroy and Shadow Communications Minister Malcolm Turnbull on May 6, where the questions were determined by the public, voting through OurSay's website.
OurSay took questions for the politicians on its site, and those whose questions made it to the top three as voted by the public put them directly to Conroy and Turnbull in a live Google Hangout debate, moderated by ZDNet journalist Josh Taylor.
Josh Taylor:
Hello and welcome to the OurSay communications debate, in partnership with ZDNet and bought to you by Alcatel-Lucent and Commander. I'm Josh Taylor, journalist for ZDNet.
We took hundreds of questions and thousands of votes on a range of issues including media and of course the NBN to be put to the Communications Minister Stephen Conroy and Shadow Communications Minister Malcolm Turnbull, and the top three will now be put directly to the politicians.
Joining me in the studio is Shadow Communications Minister Malcolm Turnbull, welcome to the program.
Malcolm Turnbull:
Good to be here.
Josh Taylor:
And joining me live from Melbourne in Brunswick if I understand correctly is Communications Minister Stephen Conroy, welcome to the program.
Stephen Conroy:
Yeah g'day, Josh.
Josh Taylor:
Now, the way this is going to run is I'll after each question I'll ask both Senator Conroy and Mr Turnbull will get 90 seconds to respond. After the follow-up question from the user, there'll be an additional minute each that they'll get to respond. Should they go over the time, I'll ring the bell to indicate their time has expired.
Now quite unsurprisingly, there were a number of questions received relating directly to the Coalition's recently unveiled alternative NBN policy, and initially it looked like we were only going to get NBN questions, but at the last minute, a question on media policy which has been a bit of a troublesome issue for the government of late has shot right to the top, so let's start right with that one.
Here to ask the first question is Gary Dickson. Please go ahead, Gary.
Gary Dickson:
Good morning, we're going to talk about PIMA! So my question: So the Centre for Policy Development found that the top three newspaper companies, being News Limited, Fairfax, and APN, hold 98 percent of assets in Australia. In comparison, the top three in the US hold 26 percent and in the UK it's about 62. So how would the government improve media ownership regulations in owner to increase diversity in this country?
Josh Taylor:
For the first response I'll go to the Communications Minister Stephen Conroy.
Stephen Conroy:
Well, thanks for that question. As you'll know, recently we had quite a heated debate in the Australian public, in the Australian Parliament, about some reforms that we put forward. We believe that fundamentally, diversity is the lifeblood of democracy. And what we've seen over the last few years and in the dying years of a Howard government was some changes to legislation that weakened the cross-media ownership laws, and we believed and I said from the day they were passed that we should introduce a public interest test, and so we put forward a sweep of legislation that unfortunately Mr Turnbull and Mr Abbott were voting against, and there wasn't sufficient support in the parliament to put that forward, but we don't believe you can just leave it as it is. We don't believe you can rely on just the ACCC when it comes to an issue that is so vital to Australia.
What we're seeing at the moment is a creeping consolidation of voices, and you've just got to look at the weekend, where Fairfax media started producing its own show on Channel 9 just recently. News Limited are producing its own show on Channel 10, and so you are seeing the blurring of the edges, the convergence that we've been talking about for the last few years coming into play. So we put forward what we believed was a robust package, it was obviously met virally by the media companies, and we believe that it is important to protect diversity in a democracy.
Josh Taylor:
Mr Turnbull.
Malcolm Turnbull:
Well, thank you. Look, Stephen's being very misleading there, the reason why there is such a concentration in newspaper assets in Australia is because the Labor Party under Paul Keating as treasurer and Bob Hawke as prime minister allowed Rupert Murdoch and News Limited to buy the Herald and Weekly Times Group back in 1986. And that was the great big move that caused the concentration in the newspaper business. Now so this is Labor's creation, this concentration.
Now as far as the overall issue today is concerned, I agree that diversity is absolutely critical. I don't agree with a public interest test, it's interesting to see that Stephen Conroy wants to revive it so that will obviously be a policy going into the next election, but I oppose a public interest test because it is completely ambiguous. It is totally political test, everyone will have a different view on it. Now the good news is diversity is increasing. Because of the internet, you have outlets like ZDNet, you have all of the international digital players, new digital newspapers, social media; the truth is newspapers are more concentrated, or as concentrated in ownership as they have been for 30-odd years, courtesy of Labor allowing Murdoch to buy the Herald and Weekly Times. The good news, however, is that newspapers represent a much smaller slice of the overall media pie.
Josh Taylor:
Gary, did you have a follow up to that at all?
Gary Dickson:
I do, actually. So, oh, I'm getting a little texty here, not a worry. So, Senator Turnbull, you talk about social media, about, I suppose, the new digital landscape of media as being, I suppose, the saviour of diversity, but it seems I mean the 2012 figures suggest that only 1.8 million Australians are actually on Twitter, so less than 10 percent of the population and News Limited alone, their daily reach really exceeds that across the country, so to me, it's hard to argue that newspapers are anything but the primary source of information, and I was wondering if you'd care to comment on that.
Malcolm Turnbull:
Well, I'm not suggesting they're unimportant, but there are so many more players now than there were 20 or 30 years ago. You know, the BBC website gets more unique monthly hits than The Australian. The Guardian, which is of course about the launch its own Australian edition gets more hits than The Courier Mail. CNN gets more hits than The Brisbane Times. The New York Times get more hits than Adelaide Now. So there is a much greater range of source of information and that's, so the good news is, and this is the only point I'm making, is that diversity is expanding, not shrinking.
Josh Taylor:
Senator Conroy, did you have a follow up to that?
Stephen Conroy:
Yeah, if I could just firstly reject Malcolm putting words in my mouth when he said I'm going to revive the public interest test, I didn't say that at all, and we've made it clear that we won't be pursuing that policy. But what is vital among that, and I agree with some of what Malcolm said about the emerging online media, what is also vital is funding for our public broadcasters. Funding for the ABC, the SBS, and community broadcasting, and we have increased the funding significantly for SBS, the biggest increase for the ABC, and we've got more coming in the budget, and what I would say to Malcolm Turnbull is give us a commitment right here, right now that if the Abbott government was to win in September, you would not allow a cut to the funding of those vital public institutions that are both in the digital world as well as in the TV world. So it is vital that that funding be protected. Can you give us a guarantee, iron clad, it will not be cut under an Abbott government?
Josh Taylor:
Do you want to quickly respond to that?
Malcolm Turnbull:
Well, can I quickly say that I am a passionate supporter of the public broadcasters, and I support them being given substantial and adequate funding at all times, but I can't give an undertaking in a budgetary context that is being left in a mess by Labor with this massive deficit. Who's to say there maybe cuts right across the board, but there is certainly not any plan or any policy to target the ABC or SBS for any funding cuts of the kind that are being canvassed by Labor, but if there is a broader austerity of some kind across the board, then all departments may have to bear some of the pain.
But can I just say that the ABC and SBS are doing an outstanding job, I know all of us, Stephen and I and everyone in politics, complains that they're not always as generous and flattering about us as we would like them to be, but nonetheless they are more important than ever, and precisely because of the decline in the business model of the newspapers which used to be — and still are to some extent — the great foundations of journalism news in Australia and indeed in other countries, because of their decline, the importance of the public broadcasters is greater than ever. And so there is no more committed defender of public broadcasting in parliament than me, but as we all agree, we all agree of course that they do have a different role to the privately owned media in the sense that they have a statutory, that's to say a legal obligation, to be fair and balanced in their news and current affairs. And ZDNet and The Daily Telegraph or The Australian, Sydney Morning Herald, they don't have that obligation. The public broadcasters do.
Josh Taylor:
And that's the media questions out of the way, but we're now going to turn to NBN policy. Now, when the Coalition announced the NBN alternative policy last month, it guarantees that by 2016, every premise in Australia will have access to at least 25Mbps, with most getting fibre to the node using Telstra's existing copper line between the node and the premise. With that in mind, for our second question, we turn to Richard Werkhoven.
Richard Werkhoven:
Hi, my question is largely to Mr Turnbull, but Senator Conroy might fill us in on the relative position of the NBN, the current NBN plan on this issue, too. Before I start, I might thank Google, thanks for the wonderful background. I'm at Google this morning because my 1.6Mbps upload speed was not sufficient for this video conferencing, so I have to come into Google to present from here.
The issue for me, and this is based on a real-world case as much as anything, the people I'm dealing with are largely small businesses who are largely working out of residential areas and not in business areas. They're usually struggling to get by, like a lot of people are these days, not having the money to spend it on something like fibre upfront. For me, the classic case is a friend whose wife runs a bookkeeping business form home, so she uses the internet quite a lot, husband wants to get a TV to watch the football on, and would like to get pay TV to watch the football — that's going to end up coming down his broadband connection. Trouble his, their broadband connection at the moment is 2.5Mbps. It's 2.5Mbps almost certainly because of in-building cabling, not because of Telstra's cable in the street. So the worry for me is that if you have fibre to the node, unless you can guarantee that you're going to give him the 25Mbps, he's going to get stuck in the past without having to spend extra money. So the question really is, for someone who's got a copper issue — whether it's in the street or in the multi-dwelling unit — are they going to get the 25Mbps that you are offering, which is going to be just enough to get them through the next couple of years anyway, or are they going to be stuck having to shell out the extra money to go the extra mile so to speak, and get on to the speed they need for just being an ordinary family, watching the football, the kids doing their homework, wife running a small business from home, and even part time employing people to come in to do some work and work from there.
Josh Taylor:
So how exactly would that guarantee work?
Malcolm Turnbull:
Well, the way it will work is that we will ensure — our instruction to the NBN Co will be to ensure that everybody in the fixed-line footprint, which will be a fibre-to-the-node area. And remember, we'll be delivering fibre-to-the-premises technology to Greenfield sites, to anywhere where it's cost effective, to anywhere where there is demand for large bandwidth — institutions, business centres, industrial parks — in other words, anywhere where it's cost effective and there is enough demand for fibre to the premises, we will deliver it there.
But in residential areas, where sufficiently high speeds can be delivered via fibre to the node, which is to say VDSL, to enable people to do anything they wish to do, such as the thing Richard's talking about there, the instruction to the NBN Co will be to ensure that nobody has less than 25Mbps. So what you have to do is do a calculation, do a line speed test, and it may be that in some areas Richard, what you would need to do is take a smaller node further out into the field. This might be a device that is small enough to fit into a Telstra pit, for example.
What some telcos refer to as fibre-extension modules. And so you give the NBN Co that direction, and in doing so you know that most premises will have speeds in excess of 50Mbps or better. That would be the bulk of them. But you would have a floor on it — so 25Mbps is not a cap, it is a floor.
Josh Taylor:
So would there be more nodes? Like a node to the node to get it closer? Is that how it's going to work?
Malcolm Turnbull:
Well, yes, absolutely, it is absolutely feasible to do that. And that's exactly how it is done by AT&T — they're using smaller devices. For example, you might have a larger node that is serving a couple of hundred houses. You may have say 30 premises 1.5km, 2km away from that node, which really were at the end of a very long copper loop. So you say, OK, we cant give them sufficient speed, we'll take the fibre out to another node, which serves 30 or 40 houses — it's what you call a fibre-extension nodule — and that's what gives them a similar outcome.
This sort of topology is very well understood, and it is — bear in mind, Richard, that recently Google, our hosts today, concluded that Britain's digital economy was the largest in the world relative to the size of the rest of its economy. Britain is the leader. Britain has used, is using, exactly the same technology that we are talking about here. So the idea that you've got to have every one on fibre to the premise to have a strong digital economy is nonsense. And that is why no other country in the world is undertaking anything as laboriously slow and massively expensive as this exercise — un-costed and un-analysed exercise — of Stephen Conroy.
Josh Taylor:
Before I turn to you, Minister Conroy, just it's probably worth mentioning to people that Labor actually went to the 2007 election with a fibre-to-the-node policy. But by 2009, that became a fibre-to-the-premise network. I was just wondering — and this probably leads into the rest of the question — you were in discussions with Telstra for quite a while around the fibre-to-the-node proposal. Was there anything they told you which made you change your mind and go to the fibre-to-the-premise network?
Stephen Conroy:
Look, the fibre-to-the-node proposal we put out to tender, and we put in place what we called the expert panel, which had some of Australia's leading technologists in both wireless technology and fixed-line technology, regulatory experts, business experts, and competition experts. They came back to us, and said, "Look, if you're going to invest this sort of money — because you have no business case which stands up that was put forth by any of the proponents — if you're going to spend that sort of money, what you should do is build a future-proof network. And you should build it all the way to the home." And as Hugh Bradlow, the chief technology officer from Telstra, says, this is his own quote, he has said it many, many times, fibre to the home is the end game. We all know that we've ultimately got to build a fibre-to-the-home network.
What Malcolm is doing is putting billions of dollars into a technology that we know, right now today, we're going to have to upgrade in the future. So the choice is very stark. Do you do an efficient rollout by doing all homes as you go through suburb by suburb, or do you do what Malcolm is proposing, which is you have to test every single line? And he's just said it, you've got to test every single line to see if it is actually going to deliver the speeds he claims. Now, the state of Australia's copper is by many reports substantially corroding in the ground. And the estimates from the sector are that it will cost $1 billion just to maintain — not to improve, just to maintain — the copper in the ground today. I live in one of the older suburbs of Melbourne.
The capacity to get good broadband, or, if it rains, to actually make a voice call, is seriously ordinary. You can only hear every second word. So I have had the experience of water, and I live in Melbourne — not in the tropics, not north of Sydney, where the humidity has an impact. So, Malcolm in his business case on page 30 just makes a blithe assumption that only 9 percent of Australian lines will need to be replaced. There's no science or rationale behind that — only 9 percent are going to be replaced.
Josh Taylor:
Richard, did you have a follow-up question?
Richard Werkhoven:
Ah, a comment which may turn into a question as I go. The issue in this case, in this specific case, and many others that I have run into, is that the wiring is not at fault in the street. It's not at fault at Telstra's knowledge or in it's database or any of those things. It's an unknown. Nobody has this information. The copper is not owned by Telstra. You can put a node as close as you like — even up to the in the cabinet — in the distribution frame in these premises. You may still not get line speed. So, Mr Turnbull, your answer doesn't really satisfy the problem. I understand your thinking behind it, I had DSL lines over 2km back in the '90s. I have a lot of experience in this area. It's not about line length, there are other issues involved, and —
Malcolm Turnbull:
Richard, I think what you're saying is that there are some multi-dwelling units — apartment buildings or office buildings — where the internal copper wiring is for some reason, which you haven't specified, unable to deliver a satisfactory signal using VDSL — is that what you're saying?
Richard Werkhoven:
Yes, it's unable to deliver a satisfactory signal using ADSL, or will have trouble over VDSL — we don't know the extent of that problem. And this is kind of my point. My point is not that this isn't a solvable problem. My point is that the nature of what you offer as a guarantee can either fix this or not fix this.
Malcolm Turnbull:
Well, Richard, can I say to you — and I don't know how much time you want to spend on this — but the standard operating practice around the world, even in countries which have very, very high bandwidth requirements, and I am talking about Korea, South Korea, Japan, and even Hong Kong is that the vast majority of multi-dwelling units are serviced by VDSL, with the fibre being terminated in the basement or in the telecom room, and then hooked through the, generally copper, LAN in the building. So even — I've visited brand new buildings, brand new apartment buildings, which are being cabled from the start with category 4 copper. Category 5 — I should correct myself — rather than fibre.
So I hear what you're saying, but I think this is a technical thing. Can I just make one point, though, just in response to Stephen. Stephen makes two points — he says we would have to upgrade our network to fibre to the premise in the future. But I don't — that may or may not be right. But the point is, how far in the future? You see the real problem with Stephen's approach is not only is he not delivering it — I mean, he'll be lucky to do 10 or 15 percent of his target by June 30. So this project is just basically not happening. It is a slow as a wet week, right. But even if you assumed that you needed to upgrade in 10 years' time, what you are saving in that intervening 10 years is all of that capital, which you're not going to get a return on. If you make the investment in 10 years' time, closer to the time when there is a demand to justify it, not only will you be saving a lot of money and expense, but you will be using the technology that is available in 10 years' time. You will be using the latest technology. So you see, saying you should invest now, to meet demand in 10 or 20 years' time, is really very, very bad business.
Josh Taylor:
Senator Conroy, your response?
Stephen Conroy:
Look, there's a number of points there. Look, Malcolm is just behaving like an incumbent telco. They just want to sweat the copper as much as they can and try and grab as much profitability out of that copper as much as they can. There isn't a government enterprise anywhere in the world or a non-incumbent that is rolling out, as Malcolm is planning on doing, buying Telstra copper. It's got to the dumbest piece of public policy I have seen in my 17 years in parliament. Buying an asset you know is literally degrading in the ground.
Malcolm Turnbull:
You've paid for it. You've paid for it.
Stephen Conroy:
We haven't paid for the copper. We've paid for access to the ducts, Malcolm. And don't—
Malcolm Turnbull:
You are—
Stephen Conroy:
I've listened to you in silence, if you could just do me the courtesy of doing the same. We've bought access to the ducts. Telstra owns the copper. So you're going to buy the access or buy the copper back from Telstra. It is degrading in the ground. It's got up to a billion-dollar price tag just to maintain. I mean, what an incredibly short-sighted piece of public policy. And Malcolm has so far, and I know we have a question to come on this, he has so far failed to mention the key word. And that's upload speeds that can be delivered by the technologies he's advancing. And Malcolm's still living in the broadcast world, he hasn't moved in the digital world yet. Waving an iPad around doesn't move you into the digital world. The digital world is about upload. It is about the distribution by individuals of content. Not just receiving materials from incumbents and from OTTs. It's about the user generated. It's about the cloud. And we'll have a chat about this in a minute. Malcolm's policy is still based around being the incumbent telco. And what we're seeing is a clear choice about preparing our economy and giving it the best technology. And Google didn't announce they're building a fibre-to-the-node network. Why not, Malcolm? What do you know better than Google? You said to Google when you had that debate in France that you wouldn't invest in your own network; you're just a free rider on the Australian taxpayer. Well, a few months later, they went and built their own Google fibre gigabit networks. So, what do you know more than Google is probably the simplest way to put it, Malcolm?
Malcolm Turnbull:
Well, let me respond to that. Google is rolling out very selectively fibre to the premise in one American city and starting at some others. But it is doing it in areas where it is cost effective, where they can roll it our aerially. See, this is, Stephen, you cannot insult the intelligence of people the way you do. Fibre to the premises is a very good technology, except where it is too expensive.
Stephen Conroy:
It's the best technology—
Malcolm Turnbull:
The point is there is a difference between fibre to the premise which you can do quickly and cost effectively where you can string it along poles, or run it through very large ducts that have been laid by developers in a new development, and in circumstances where it is extraordinarily expensive and time-consuming as you have discovered with your constant failure to meet your Brownfield targets. I mean, come on, Stephen, you are running so far behind. You are meant to be passing 1,300 premises a day at the moment — how many are you passing? Thirty? I mean, this project is failing. And it's failing because you've failed, you fail, to take into account the time and the cost of doing fibre to the premise in Brownfield areas, and that is why you've got to be selective. So, where you can do it cost effectively, and cheaply, do it. Knock yourself out. But where it is hugely expensive and you do not have the demand for the services and the speeds that only fibre to the premise can deliver, then get people upgraded now. See, the tragedy is this, Stephen. There are 2 million, there were 2 million premises in Australia, that couldn't download a YouTube video in 2007. There still are. Six years, and you've achieved nothing in terms of practically changing people's digital experience.
Stephen Conroy:
Sorry, I have to respond there, I'm sorry, Josh. You can't just give a tirade like that of dishonesty and misleading all the viewers at the moment without me getting a chance to respond. I mean, Malcolm made a whole string of claims in his document which he released about the cost of fibre to the premise in Brownfields. And Mike Quigley absolutely demonstrated at the joint parliamentary committee, I'm sure many of your viewers have read the transcript or watched it live, that the cost living is $2,100 and $2,500. Which is nothing like the $3,600 or the $4,000 estimates which Malcolm used to bandy around before that. I mean, the great part about debating Malcolm is that he's so utterly compelling in the moment, as long as he can convince you to forget everything he's ever said before. Two and a half years ago, Malcolm Turnbull, on radio in North Queensland, said, "I can do everything I need to do on 3 meg". And he's on his mobile phone. Then, a year and a half ago, he said, "No, families need 12."
Malcolm Turnbull:
This is typical, this is pathetic, Stephen. Why don't you address. Why don't you address, Stephen—
Stephen Conroy:
It's your own words—
Malcolm Turnbull:
The difference between you and me is that I'm talking about the fundamental issue, which is the cost effectiveness of alternative technology. All you want to do, all you want to do is just sling back—
Stephen Conroy:
I don't want to sling it back. I'm just trying to point out what you have consistently said. You've moved from 3 meg, to 12 meg, to 24 meg.
Malcolm Turnbull:
No; that is not true.
Stephen Conroy:
Telling the Australian citizens that they only need 25 meg. That's what they need. That's what families need. Tony Abbott said it.
Malcolm Turnbull:
This is, this is pathetic. Stephen, Stephen, you are incapable of focusing on the fact your project is not being delivered. It is not happening. Why do you keep on failing you meet your targets?
Stephen Conroy:
Josh, if your going to let him talk over me, I'll have to respond.
Josh Taylor:
I was just going to say, when it comes to doing the fibre-to-the-node rollout, depending on how long it takes to renegotiate with Telstra and everything like that, what's going to happen if you suddenly encounter similar issues with delay in construction, and you can't get to the kind of speeds you want to see in the rollout?
Malcolm Turnbull:
The great virtue of fibre to the node is that you don't have to go into the customer's premise. Not only, just hang on, under fibre to the premise not only have you got to get fibre to the premise, through the ducts, or digging through the streets or up the driveway, but you've got three devices you've got to install. You've got one on the outside, and two on the inside. The virtue of fibre to the node is there is no disturbance at the customer's premise at all. And that is why BT has been able to pass, almost, just about got their 19 million premises. That's more than all the premises in Australia in three and a half years.
Josh Taylor:
They're a lot smaller than Australia, though.
Malcolm Turnbull:
But the big issue is there is so much less labour involved. Pulling fibre to those nodes is relatively straightforward, because the E-side ducts are bigger and generally in better nick. The D-side ducts between the PCPs and the customer's premise is where you're having the problems at the moment, Stephen, because they are smaller and they're touched much less often, much less frequently, and so they tend to fill up with silt and dirt and all of that stuff. And that is why it is much more laborious.
I mean, we've got to be realistic here. What we've got to do is form a judgment about cost of deployment, time of deployment, level of service, demand for service. They're the for sort of factors that you've got to bear in mind, and depending on what they are in each case and each geography, you go for fibre to the prem or fibre to the node. That what rational people do.
Josh Taylor:
I'm just going to correct you on one thing there. Like what, with the build drop now, you don't have to disturb the customer premises they can go right to the side of the wall and not actually have to get customer permission to do that.
Malcolm Turnbull:
But for an activation, for fibre to the node, the only ... for a start, if you've got an ADSL modem in your house. If you upgrade to fibre to the node, you'll get better performance than that. If you want the higher speeds, yes, you'll need a VDSL modem, which is a 50-buck device you can plug in yourself. I mean, it is a very, very straightforward exercise. That's the advantage of it compared to fibre to the premises. Which is why it takes less time.
Stephen Conroy:
Any chance I can join in?
Josh Taylor:
Yeah, yeah, sorry, go for it.
Stephen Conroy:
The core facts are this: An Abbott government are going to borrow $29 billion to fund their network. And they are going to give us a second-rate network that Malcolm keeps admitting, and keeps running away from, that we'll have to upgrade in the future. Sometime in the future — it may be five years, 10 years, it could be even 30 years, he's even been saying. But what the data downloads keep showing is very simple. According to the ABS statistics, already 1.6 million Australians, 35 percent, are taking a service which Tony Abbott say families need, and the data increases from the Cisco documents that many of you will have seen, who are watching today, show that the data downloads just keep going like this.
The sort of network that Malcolm keeps talking about will need to be upgraded much sooner than Malcolm keeps claiming, much sooner than people will realise, and you've just got to look at that. So, Malcolm Turnbull wants to spend $29 billion. The Gillard government is going borrow about $39 billion dollars and give you the world's best network, a gigabit network, that enables it to be upgraded very simply because the fibre will already be in place. Malcolm knows all the things he's pretending he's not going to have to do in the future, and his whole policy collapses on the basis that it's a pretence about what the country is going to need in the future. When you build infrastructure, you build it for the future. Malcolm, if he had been in charge of the Sydney Harbour Bridge in the '20s, would have built a one-lane-wide bridge, and that's the key choice for Australians going into September.
Josh Taylor:
And just for our last question, it was supposed to be asked by Raj Barron, but unfortunately he was not able to join the hangout this morning. So I'll ask his question in his place. So, we've been focusing on download speeds, but this is actually in relation to upload speeds. His question is, "We know what download speeds we will get with both fibre to the node and fibre to the premise, and download speed is not the only important thing anymore. The question is to Mr Turnbull: What upload speeds will your plan for fibre to the node guarantee, keeping in mind that from the node to the premises there will still be copper cabling.
Malcolm Turnbull:
The ratio of download-upload is a commercial decision future NBN Co would make, but there is no technical barrier to having very high upload speeds. Let me give you an example of what BT is offering. Their highest tier is 76 down, 19 megs up, and the ratio they have between down and up is four to one, but that could be three to one or it could be five to one; it depends. You've got to make a judgment based on commercial demand. I agree that there is more uploading now because of the cloud. But because the bulk of additional bandwidth being consumed across the internet is video entertainment, actually the networks are becoming if anything more asymmetrical at the customer premise, because we are downloading so much more television and movies into our premises, but there is no technical barrier there.
Can I just make one point about the Sydney Harbour Bridge; Stephen loves to use this metaphor. It just shows what he does not understand about telecom networks. If you build a bridge, you cannot tack on a new lane every 10 years. Telecom networks are not like bridges or tunnels; they are organic. They are being upgraded all the time. Every day, every network is getting a bit better, a bit bigger, a bit more diverse. And that is the great advantage, that's why you don't have to put all your investment in today with today's technology to anticipate a demand in 30 years' time. That just isn't smart. So even if Stephen is right about 30 years demand, you don't have to invest in that today.
Final point, just because you've got a lot more data being transmitted across the internet that's growing exponentially, that doesn't meant that the size of the pipe to the house has to grow exponentially. The fact is that we can consume, as we all know we are, a lot more data each month, but without having a bigger pipe into our house. So that is a fallacy to think those two things are absolutely linked. There is a connection, but it is not as direct, and that is very important. You can be watching hundreds of movies every month, consuming an incredible amount of data, and still have a 15 meg, 25 meg link. You don't need that huge speed, that huge pipe to download all that data.
Josh Taylor:
Senator Conroy, your response.
Stephen Conroy:
Isn't it great to live in a country that Malcolm Turnbull and Tony Abbott know what we want to do with the internet for the foreseeable future? Isn't it great to have such vision, and somebody to say, 'I know what you're going to do with the internet in the future'? It's fantastic, we are blessed to have Malcolm and Tony Abbott.
But let's be serious here. This is a question I understand came from a cloud provider, and Malcolm doesn't want to talk about upload speeds and what he can guarantee, because it's like a wooden stake to a vampire. Because his network cannot deliver the sort of upload capacity that a fibre-to-the-premise network can deliver. It's as cut and dry as that. Malcolm can sprinkle pixie dust around and call it vectoring and he can do all that sort of stuff but he cannot guarantee these upload speeds and if you are going to have a cloud based digital economy, which is where things are moving, you've got to be able to give reliable upload speeds. You don't need to be able to guess, 'Am I this close to a node, am I this close to one of the many nodes Malcolm now wants to put in pits? What's it going to be like when it rains?'
Famously, a former Telstra engineer said to me once, 'Do it once, do it right, do it with fibre'. That's what this debate evolves around to. Actually not having somebody, a minister for communications who says, 'I know what you're going to do with the internet in the next two years, so I'm going to give you a bit of an artificial cap, and if you grow faster than I think you're going to grow, then that's tough.' Just put it in place, do it once, do it right, do it with fibre, and then let the innovation, let the ingenuity, let the incredible genius that the Australian public have, let it loose. Stop thinking about just downloading movies, Malcolm. This is about uploading. This is about the capacity for people to distribute their own work. It's about the gentleman who called before and the bookkeeper who wants to upload files. I was in Gosford last week, when we turned the NBN on. I met a company that is moving into the CBD in Gosford, because at the moment what it has to do, each day it's finished its work, it makes three separate DVDs and goes to three separate homes and puts them in and starts uploading them from three separate homes. That's its business model today. And what it's going to do is move into the CBD, so it can upload all of its work straight away on one connection and not have to drive to their in-laws and their sisters.
Josh Taylor:
Just one follow-up question: In regards to the fibre-to-the-node approach around the node, that is mainly being done by the incumbent telecommunications companies who already have access to the copper loop. How exactly are you going to approach Telstra and make sure that you can actually get ahold of that?
Malcolm Turnbull:
We are absolutely satisfied that we will get access to the copper, that is to say, the D-side copper. Indeed, the copper between the exchange and the premise both the D-side and the E-side — not that you need the E — without any further payment. You've got to remember that under the NBN Co contract with Telstra, they are being paid about $1,500 as premises are switched over to the NBN Co. At that point, their copper is valueless, it's just scrap lying in the ground somewhere. So, from Telstra's point of view, they are being paid, and so we are very confident that we can access their copper without any additional charge.
Now, if Stephen Conroy had been competent, of course, he would have actually negotiated an auction over that copper. But of course, as this is regrettably this is the first time he'd done a commercial deal — it's a pity he cut his teeth on such a big one.
Stephen Conroy:
How did that FAI-HIH deal go, Malcolm? That was a cracker!
Malcolm Turnbull:
If that's the best you can do —
Stephen Conroy:
You advised Ray Williams to buy FAI, didn't you, for a couple of hundred million! That was a cracker of a deal! That had no long-term effects on the economy.
Malcolm Turnbull:
I'm glad you said, that is completely untrue.
Stephen Conroy:
Why did you pay money to the liquidator?
Malcolm Turnbull:
I gave Ray Williams no advice at all. I gave no advice at all.
Stephen Conroy:
Well, how much did you pay? C'mon it's a commercial in confidence — you can tell us.
Malcolm Turnbull:
You are so desperate that all you can do is smear and abuse. That's the best you can do, you poor fellow. Here you are, coming over such a mess...
[Multiple voices interjecting]
Malcolm Turnbull:
— such a mess, such a grub, Stephen. You're such a sad figure.
Stephen Conroy:
Oh, Malcolm. Malcolm.
Malcolm Turnbull:
If you want to know about HIH, read the Royal Commission report, which made no adverse findings against me at all.
Stephen Conroy:
I read the liquidator's report. Why don't you pay money to the liquidator? Just say you didn't if you didn't.
Malcolm Turnbull:
I didn't pay any money to the liquidator. There you go.
Stephen Conroy:
Tell us, tell us, the company paid on your behalf. C'mon.
Malcolm Turnbull:
I didn't pay any. I didn't pay any.
Stephen Conroy:
Now, if I can just get back to the topic for just one second. Malcolm repeated today what he wrote in his policy document: That Telstra valued the copper in the ground at zero. I was just wondering if Malcolm could point to one statement that Telstra have made publicly where they agree with that.
Malcolm Turnbull:
I think Tony Warren was quoted in the Financial Review as saying that for the copper under the current contracts after it has been disconnected, I think his exact words were, "minimal value".
Stephen Conroy:
And you're planning on renegotiating the contract — which could restore its value.
Malcolm Turnbull:
Stephen, we have no doubt, we are very confident that we can proceed very quickly to a fibre-to-the-node model and get access to the copper without any additional cost to the Commonwealth.
Josh Taylor:
Senator Conroy, I will just gear this question towards you, then. You were involved with the two-year-long negotiations with Telstra the first time. Do you think that Telstra will move that quickly to come to the table and make an agreement very quickly?
Stephen Conroy:
Look, Telstra have said publicly that they intend to be as well off today as they — as well off in the future as they are today. And Mr Turnbull said he will make them "whole", I think is how he has described it, which is obviously a broad phrase, and it's up to Malcolm to explain what he means by that.
Malcolm Turnbull:
I'm happy to explain it.
Stephen Conroy:
Telstra have said on behalf of their shareholders that they are going to be no worse off. They are going to be the equivalent of the $11 billion net present value. And what we'll see is that Telstra will be as straightforward with Mr Turnbull — if he was to be the communications minister — as they were with us. They will take a very tough negotiating position on behalf of their shareholders, as they should. And if Malcolm was to be in that position — it's not that a commercial arrangement could or couldn't be made — it's about delivering a second-rate outcome, which will need to be upgraded in the future and still spending $29 million. They're going to borrow $29 billion dollars, compared to the Labor government's $31 billion that's the net borrowing for governments, but they're going to deliver a second-rate network. It just comes down to Malcolm Turnbull knows better than Google what ordinary people are going to need in the future.
Josh Taylor:
I'm sorry, we're out of time. Thank you very much both of you for joining me, and Richard and Gary for joining us in the Hangout today. Thank you very much.
Transcript republished from Malcolm Turnbull's blog with permission.