V-T Day wins NBN, but at what cost?

As the House this week puts last week's Senate dramas behind us, we're facing down a new telecommunications reality as a split Telstra looms large. Yet we're also facing down a new political reality.

It's not clear whether there were any Eisenstaedt-esque kisses on the floor of Parliament on Friday, but one suspects Stephen Conroy and his peers would have put the taut political situation of the past fortnight on the back burner this weekend in favour of uncorking a bottle or ten of champagne to celebrate V-T (Victory over Telstra) Day. Yet even as the dust settles, it is clear that analysis of the struggle to pass Telstra separation legislation will continue in private circles for some time to come — and it won't all be positive.

Ironically, it was Nick Xenophon — a man whose Greek surname literally means "stranger's voice" — who was able to force Labor to back down and finally, albeit at the eleventh hour, release something substantiating its NBN vision. It was, indeed, the voice of several Canberra political outsiders that made the Telstra separation legislation momentous not only for what it was, but also for how it was passed.

Here, for the first time in recent memory, was an incredibly important law with far-reaching implications that could not simply be rubber-stamped by a majority government. Not only did the government risk a near-death policy experience, but it suffered the ignominy of Julia Gillard demonstrating beyond a doubt that she is but an irrelevant figurehead in the government she supposedly leads.

When Gillard says "no", it is now clear, she really means "not until I'm forced to" — and it would be naïve to assume that her political adversaries won't be capitalising on this point to paint her into corners in similar situations in the future. Gillard put her foot down to support Stephen Conroy as he played a dangerous game of legislative chicken, and ended up putting it in her mouth as it became clear Xenophon could kill the legislation unless the government stopped digging in and just gave a little bit.

And it did give only a little bit: as many commentators (and not just perennial NBN grouches Malcolm Turnbull and the Alliance for Affordable Broadband) argued, the document the government gave was so limited in its scope and vision as to be but a footnote to the ongoing discussions around the NBN.

Not only did the government risk a near-death policy experience, but it suffered the ignominy of Julia Gillard demonstrating beyond a doubt that she is but an irrelevant figurehead in the government she supposedly leads ... Gillard put her foot down to support Stephen Conroy as he played a dangerous game of legislative chicken, and ended up putting it in her mouth.

For all the attention the business case document drew, it was never actually going to be that interesting. NBN proponents assumed it would contain some magic revelation that would erase all doubts about the plan, while its opponents assumed it was filled with incriminating evidence that they could use to show that Labor has, as the Coalition likes to allege, been trying to hide the fact that it has no idea what it's doing. In the end, it offered neither; it was little more than a MacGuffin the pursuit of which saw Parliament redraw its battle lines and, in the process, nearly choke on its own bile.

In fact, for all its languor, the business plan is both lucid in its definition and clear in its intent: this was not a political document, but a careful plan from a government body on how it's going to execute the instructions it has been given. There were some new revelations, but they were mostly procedural and not politically contentious as Parliament was hoping.

Mike Quigley, who occupies what has become a hugely politicised position, has always struck me as someone who just wants to get on with the job — and this document, like his carefully worded rebukes of NBN FUD and his recent letter summarising the business case, was his two-fingered salute to the Canberra establishment.

Was it then, as Malcolm Turnbull alleged, a "thoroughly inadequate" document? Answering this question requires asking a second question: adequate for what?

Adequate to convince Turnbull of the NBN's merits and financial soundness? I'm not sure that will ever happen. Turnbull is demanding financial certainty and accountability from the NBN that it simply is not yet ready to deliver. As I have previously argued, his best approach is to give Labor until the next election to prove the NBN is actually starting to deliver the change it has promised. It's just too early to go off half-cocked about how the NBN isn't a fully formed profit machine yet. The NBN Co business case supports this suggestion: we will, it suggests, have a good number of live NBN services running well before the election and Turnbull can evaluate it while coming off less as a stubborn mule, and more like a productive critic of the progress to date.

Turnbull was completely off the mark in his assessment of the document; Despite his constant recriminations it was adequate to convince the rest of the Senate that the NBN plan has enough merit ... [especially] Steve Fielding — who was given more detail about the business plan than what was in the publicly released document, and concluded based on this information that the legislation was still worth voting for.

From another perspective, it's clear that Turnbull was completely off the mark in his assessment of the document; Despite his constant recriminations it was, after all, adequate to convince the rest of the Senate that the NBN plan has enough merit to let the project continue. It's particularly worth noting that it was adequate enough to convince Steve Fielding — who was given more detail about the business plan than what was in the publicly released document, and concluded based on this information that the legislation was still worth voting for. This vote of confidence was doubly important coming from Fielding, who will depart from the Senate imminently, but saw enough merit in the NBN plan to give it the go-ahead.

Yet the whole fiasco around the document has proved adequate to showcase three things: the weaknesses in Labor's NBN execution, internal political struggles and the idea that there should be substance to Labor's supposed claims of transparency. Conroy was playing a dangerous and unsavoury game until Xenophon played his trump card, and in purely political terms Conroy came off the lesser man.

Labor may have won the election, but this fiasco has shown just how tenuous its hold over public policy remains. Gillard and Conroy had to work for this one, enabling Xenophon and the Greens to assert their relevance along the way. That such an innocuous document could generate such bilious argument and a near-mutiny in the Senate, suggests that it's going to be a long, painful haul for Labor as it works to pass the rest of the NBN-related legislation.

This may be a great example of democracy in action, but it was an exercise in exhaustion for everybody involved; Real debate has been so rare in a Labor-dominated Parliament for so long that it must have stretched muscles many MPs forgot they had. It was also an exercise in humility as Stephen Conroy's critics watched him go from the stubborn Senator who narrowly avoided censure by his colleagues, to securing his place in telecoms history as the man who broke Telstra (I mean "broke" in the horse sense, not in the Gordon Gekko sense).

As the House of Representatives today rubber-stamps the legislation, there will be great optimism in many circles that the company can now move ahead towards its future. Yet we can certainly expect more fireworks as the country wakes up from its end-of-year political hibernation and the separation of Telstra becomes harsh reality. Whether Labor approaches that situation with the hubris it brought into Parliament a fortnight ago, or whether it adopts a more conciliatory and productive posture in the recognition of the humbleness it has hopefully learned, will set the real tone as the NBN ramps up in 2011 and beyond.

What do you think? Has Labor been humbled? Or has it just asserted its political muscle?

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