NBN hard running undoes sensible Optus HFC decision

Under-invested in and not fit for purpose, it was clear the Optus cable network needed overbuilding, but the Byzantine NBN wanted to back it to the hilt.

Such are the rhetorical knots that NBN has tied itself into over recent years that even when it makes a sensible and correct decision to ditch the old Optus hybrid fibre-coaxial (HFC) network for fibre to the distribution point (FttDP), it turns into a discussion of backflips and backdowns rather than users on a poor network receiving a sorely needed upgrade.

NBN has been trying to extinguish the flames of a backlash on social media by pointing out that Optus was to be paid AU$800 million by NBN under the Labor government in 2011, the same number it is slated to receive from NBN in its Coalition guise.

"No extra money paid for option to access network," the company proclaims about the Turnbull-era deal, while deciding to ignore the amount of time and money spent to renegotiate the Optus deal.

In usual circumstances, a network provider would expect to be congratulated for giving its customers a better connection than what they had, but the determination from NBN and its minister to ensure it is always on the front foot has merely added to the hash that surrounds the network rollout.

Former Communications Minister cum Prime Minister Malcolm Turnbull labelled the Australian Competition and Consumer Commission (ACCC) signing off on the Labor deal to shut down Optus' HFC as a dark day when he was in opposition.

"A black day indeed for the ACCC and competition in Australia," he said. "It is Optus that has hit the jackpot. AU$800 million in cash.

"The truth of the matter is this: The NBN Co are not lunatics who shell out AU$800 million for nothing, as the ACCC suggest.

"On the contrary, the HFC is an extremely viable competitor with the NBN Co and because its original capital cost was written off long ago, Optus could upgrade it for a modest cost which would enable it to undercut the NBN on price and provide equivalent services for most customers."

History has shown Turnbull to be comprehensively wrong on this count, as have leaked documents from within NBN that showed Optus' HFC network was a white elephant.

The document also showed that NBN would need an extra AU$400 million in peak funding if a decision was made to switch to FttDP -- a cost that is well within the company's funding envelope, but it does arrive at a time when NBN has to source its future funding from private markets.

On Thursday, Minister for Communications Mitch Fifield took to Sky News to repeat the old trope that Labor's previous fibre-to-the-premises rollout was based entirely on dogma.

"Labor took a theological approach. If there was any deviation from the one true path of fibre to everywhere, then for Labor that was heresy," Fifield said.

"What Labor are seeking to do is to apply the theological template to our rollout. Now the whole basis of our rollout is use the technology that makes sense. If along the track it makes sense to do something different in order to see the NBN rolled out fastest and at lowest cost, then that's what NBN should do. And this is exactly what NBN is doing."

What you don't see mentioned in Fifield's words are any mention of future-proofing, or rolling out value for money -- just the cheapest option. One could say it bears the marks of an almost fanatical devotion to saving money.

Earlier this year at Senate Estimates, NBN CEO Bill Morrow said it had been a year since the NBN board was made aware that fibre to the distribution point (FttDP) was closing in on becoming the most cost-effective option for NBN to deploy.

But despite FttDP being only AU$400 more expensive than FttN -- even though it is not being developed and deployed at scale, unlike FttN -- the NBN board would not budge on allowing the company to use the more future-proof technology, because it is worried about peak funding and is driven purely by the need to roll out the cheapest and easiest-to-deploy technology.

"We see FttDP as a great upgrade path to be able to take the node and push that fibre closer to the house," Morrow said at the time. "If those prices can continue to come down, and [we] can continue to find ways to shave off more weeks, more months of that construction build, then we will move into and use this technology over that of FttN."

In the release of its 2017 Corporate Plan NBN signalled what it was up to when it reduced the HFC footprint for the now increasingly mysterious FttN label.

Since FttN covers fibre-based fixed-line products which are not FttP, that means it covers copper runs of only a few metres all the way up to half a kilometre or more.

Bundling the short-run FttDP and fibre-to-the-basement (FttB) products with the more troublesome FttN product under a single moniker allows NBN to muddy the waters when reporting statistics for the network.

For instance, NBN could release statistics saying a third of its FttN users can get gigabit speeds, but they will not tell you how much of that third contains FttDP and FttB users -- it will most likely be all of them and some very lucky FttN users who live next to the node.

Because of its secrecy, glass jaw, and obfuscation over recent years, it is little wonder each NBN decision is looked upon with a large amount of scepticism.

Especially when the company decides to go nuclear and call in the federal police on information that is proving increasingly correct as time goes on, and hardly the fool's gold Fifield claimed it was.

At the end of last year, then Shadow Communications Minister Jason Clare said he expected NBN to move to an FttDP rollout using G.Fast technology.

For the sake of those that are about to be saddled with FttN for the foreseeable future, let's hope there are more "backflips" from NBN to come.

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