Libs kick NBN policy own-goal, but can Labor convert?

Summary:By announcing its policy, the Coalition has finally framed the NBN discussion in more realistic terms. It has also invalidated six years of its own arguments that Labor was spending too much on its NBN.

My first thought while reading the Coalition's national broadband network (NBN) election policy channelled that bon mot about pigs and lipstick, but the second was more instructive. That is: By offering a policy that is both better than its last election policy and far more expensive, the party of "no" has conclusively proved that its long-standing push for austerity is incompatible with the design goals of a modern NBN.

Lipstick-On-Pig
The Coalition rolled out the red carpet for its new NBN policy — but is it just lipstick on a pig? Image: David Braue/ZDNet

In other words, you get what you pay for, and you have to pay for what you want to get.

The Coalition plan is a concession to the reality of telecommunications that both parties had years ago ignored, but which Labor accepted first when it moved from its $4.7 billion fibre-to-the-node (FttN) posture to its $43 billion (subsequently revised to $37.4 billion) fibre-to-the-premises (FttP) commitment.

Compared to this investment, the Coalition's insistence during the 2010 election that around $5 billion worth of broadband band-aids would solve our problems seemed downright foolish. After all, building a network like this is expensive, complicated stuff. By committing six times as much this time around, the Coalition has finally accepted this — and framed the NBN discussion in more realistic terms.

It has also, I should add, just invalidated six years of its own arguments — that Labor was spending too much on its NBN, and that it could actually be completed for the price of a few packs of Hubba Bubba and some doughnuts to keep the workers motivated.

That's just so much water under the bridge, apparently: To get your vote, the new Coalition is ready to spend up big on a brand spanking old network that will, it solemnly swears, deliver anywhere from one quarter to one half the speed of Labor's NBN possibly two years earlier and for a similar cost.

But wait — there's more! Vote now and the Coalition will also throw in guaranteed obsolescence, substandard performance, some pretty iffy performance projections, teeth-gnashingly awful upload speeds, and an utter lack of vision around what Australia should actually do with this network that — as Malcolm Turnbull repeated several times during interviews after the announcement — they didn't want to build in the first place.

Realising that even your average I'm-no-Bill-Gates punter wouldn't see much difference between $29.5 billion and $37.4 billion, Turnbull once again dug deep into his weasel-maths textbook to conclude that Labor's NBN will actually cost $94b by the time it's done.

If that sounds like a pretty crap election campaign to you, you're not alone. Spending $29.5 billion on an overdue, half-arsed grudge isn't anywhere near as inspiring as proactively committing $43 billion to a project that will modernise the nation and reinvent civilisation as we know it.

Even the Liberals know this, which is why the next part of their election push is to try to make their policy look good by wrapping it in insinuations, untruths, and utter fabrications. Sala-ka-du-la, men-cha-ka-pu-la, bibbidi-bobbidi-boo — put 'em together and what have you got?

What you've got, in this case, is a rather unconvincing attempt at making your porkies look like truths. Realising that even your average I'm-no-Bill-Gates punter wouldn't see much difference between $29.5 billion and $37.4 billion, Turnbull once again dug deep into his weasel-maths textbook and went through what appears to be an intense series of calculations to conclude that, despite all suggestions to the contrary, Labor's NBN will actually cost $94 billion by the time it's done.

I have previously had a few words to say about the Coalition's affinity for weasel maths (and, if I may say so, if you add the $11 billion Telstra contract to the Coalition's $29.5 billion, my estimate of a $40 billion total turned out to be spot on. But I digress).

Sure, a $29.5 billion Coalition FttN NBN sounds cheaper than a $94 billion Labor FttP NBN, and even supports Turnbull's claims that the Coalition option will be one-third of the price of Labor's NBN. Well, not Labor's actual NBN, mind you, but the one that Coalition modelling has creatively decided to concoct to legitimise its own model.

That $94 billion figure sounded as arbitrary to me as it probably did to you, so I had a look through the background document that contains the financial assumptions on which this $94 billion figure is based.

It's a voluminous tome, which at 36 pages, is twice as long as the Coalition's own policy. But down around page 27, we arrive at the crux of that figure: It's a worst-case scenario in which NBN revenue grows more slowly than forecast (3.5 percent ARPU real growth, rather than the projected 9 percent) and premises costs are 40 percent higher than forecast.

Bibbidi.

It also assumes that 50 percent more households will go wireless-only than forecast.

Bobbidi.

And that it will take 50 percent longer for Labor to finish its rollout — 15 years, rather than the expected 10 — thereby exacerbating the other factors.

Boo.

Put 'em together and what have you got?

A massive, worst-case, perfect-storm scenario confected for the express purpose of making the Coalition's alternative seem cheaper to voters than Labor's existing rollout. But Turnbull, of course, never mentions this when spouting the figure to mainstream media, which loves easily digestible numbers and doesn't care a whit where they came from.

Then there are the flat-out deceptions, which should anger any right-minded fan of either side of the NBN debate.

The Coalition's suggestion, for example, that "within a few years, FTTN should support downloads exceeding 100 megabits per second over short lengths of copper", is a feeble attempt to compare copper-based topographies to fibre. What the Coalition is not saying here is how short — and the reason they are not saying how short is because the answer is just a few metres.

A more honest way of conveying this would be to say that the Coalition's FttN infrastructure will happily deliver 100Mbps if the Coalition installs fibre nodes in front of every home in Australia.

The Coalition policy also speaks of an "equitable re-negotiation" of the government's contracts with Optus and Telstra for access to their HFC networks. Those networks will once again get the ability to carry broadband data services — which they have already indicated they are happy not to do — but will have the added bonus of seeing ARPU slashed as the Coalition purports to impose open-access provisions onto HFC networks that have never, ever had them.

For some reason, the Coalition believes that both carriers will jump at the option to re-assume their HFC maintenance costs and ongoing operating expenses, then give away the keys to the kingdoms that they so carefully created for the express purpose of being sustainable monopolies.

It is not as inherently awful a policy as the 2010 election policy. This time around, the Coalition has outlined a more realistic, deliverable, albeit technologically odious option whose devil is in the many, many details ... kudos this time around for putting enough work into the policy that it at least looks like they're trying.

This is optimistic, to say the least — and deceptive, in the worst, because on page 9, the Coalition states quite clearly that it will overbuild those same HFC networks by 2019. What retail service provider would consider investing in the equipment to become an open-access reseller of, say, Optus HFC services, knowing full well that its investment will be moot within six years?

Another bout of creativity comes from the Coalition's assertion that it will "investigate opportunities to invigorate and enhance competition among retail service providers (where hopes that monopoly infrastructure would enable a dynamic retail market have so far been unfulfilled)".

I know Turnbull has been spending most of his time studying overseas FttN deployments, but anybody who has been watching Australia's NBN market would be well aware that RSPs have been aggressively jockeying for position with their early NBN plans, with prices down as low as $29.95 per month and all sorts of plans far cheaper than the $66 per month cost contained in the Coalition's NBN policy.

Suggestions, therefore, that the "dynamic retail market" remains unfulfilled are less than accurate. The NBN's biggest problem isn't its construct, which the Coalition policy goes to great lengths to impugn; it is the NBN's execution, which has suffered of late, and is looking iffier and iffier as contractors continue to pull up lame well before the race has barely begun.

To be fair, despite the great lengths to which the Coalition has gone to try to make its policy look better than Labor's, it is not as inherently awful a policy as the 2010 election policy. This time around, the Coalition has outlined a more realistic, deliverable, albeit technologically odious option whose devil is in the many, many details.

That doesn't necessarily make it a better option than Labor's — indeed, few would suggest it was inherently better — but the Coalition at least gets kudos this time around for putting enough obvious work into the policy that it at least looks like they're trying. Given that a Coalition election win is a distinct possibility, the next few months should be committed to pointing out the deficiencies in this new policy, and hoping against hope that Turnbull will work to improve them.

Although I've previously suggested that the most appropriate time to weigh a change of boats would be 2016 rather than 2013, things are as they are. The Coalition has now played its hand, and Labor's biggest challenge before the election is to find some contractors that can actually deliver what it has promised — and fast — before the fate of our broadband races out of its hands like a greased pig out of the sty.

What do you think? Has the Coalition outlined a viable policy? Does it have merit? And can it actually be delivered as quickly and cheaply as Turnbull wants us to believe?

Topics: NBN, Australia, Government : AU

About

As large as the US mainland but with a smaller population than Texas, Australia relies on ICT innovation to maintain its position as a first-world democracy and a role model for the developing Asia-Pacific region. Award-winning journalist David Braue has covered Australia’s IT and telecoms sectors since 1995 – and he’s as quick to draw le... Full Bio

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