Will NBN karma run over Libs' dogma?

Summary:The change of government in Victoria and its posture towards the NBN-enabling opt-out legislation highlights the persistent dichotomy between what needs to be done and what will be done.

A few years ago, I asked representatives at a government spectrum conference why, if they were so serious about the digital TV switchover, they didn't mandate TV makers to build digital TV tuners into all their models. The reply — that they were going to let the private market sort that one out — did little to fix the then-current situation, in which some TVs had built-in HD tuners and others were just display panels that required external boxes.

Road block sign

(Road closed sign image by US National
Parks Service
, public domain)

The TV market has steadily moved towards HD tuner ubiquity, but its earlier days were a disaster of confusing marketing that has no doubt seen many consumers still watching TVs with external boxes — a serviceable but less-convenient solution. Yet as the dust from the Parliamentary Telstra-separation brouhaha settles and we brace ourselves for the release of the sure-to-be-bland NBN Co business case, it appears our political representatives are now favouring a hands-off approach that echoes the digital TV problems, but could be far harder to resolve, and cause major headaches for a Telstra that just wants to get on with things.

Moves by Victoria's newly-elected Baillieu government give a taste of the duplicity and frustrating inertia to come as the next round of NBN-related legislation is tabled and state governments weigh up their potential role in aiding, or handicapping, the NBN roll-out. Even though Baillieu's Liberals have said that they would support the NBN roll-out in their state, their recent leanings against an opt-out policy for the NBN show they, too, are favouring a non-interventionist policy and not afraid to incur the wrath of the IT industry in the process.

This newly-announced approach may echo the Liberals' collective scepticism about the NBN, but it's also an optimistic free-market play that ignores the political and technological reality around the project. Namely, with Telstra now on its way to structural separation and its copper network access agreement likely to reach shareholders within the next few months, the company will be moving quickly to take the government's billions and run.

This approach may echo the Liberals' collective scepticism about the NBN, but it's also an optimistic free-market play that ignores the political and technological reality around the project.

As David Thodey has repeatedly stated, the company does not want to be left holding the bag, maintaining the copper network and associated universal service obligation for any longer than it has to as it waits for the last dial-up and ADSL holdouts to decide they're ready to adopt NBN-based fibre services. Yet that's exactly what could happen if the NBN continues to suffer political kneecapping that favours political advantage over telecommunications policy reality.

I haven't gone door-to-door to ask, but I'd wager that most householders are only passably interested, if at all, in the mechanics of the wholesale internet market. While Liberal governments harp on about elimination of consumer choice, those consumers won't care whether their internet wholesale service is carried over Telstra copper or NBN Co fibre; they just want reliable, faster internet, and they want it yesterday. Positioning the choice of NBN Co and Telstra wholesale networks as some sort of important choice is just one more political smokescreen designed to sour consumers on the new network.

Long-time readers will recall my recent admonition that the Liberals should stop opposing the NBN on sketchy political grounds and let it soar or fall on its own. The latest proclamation from Victoria, where the previous Labor government had indicated an opt-out scenario was forthcoming, raises this issue again, but with something of a paradox.

That paradox reads thus: if the Liberals seize power across state governments and consistently refuse to support an opt-out approach, they will surely succeed in hobbling early-stage switching to the NBN. Internet service providers caught in the transition phase will have to lure customers to what is presumed to be a more profitable wholesale structure under NBN Co than the current Telstra arrangements; this will require a formal transition plan and, if customers don't already have NBN connections, an installation fee that will serve as a disincentive towards customers taking up the faster NBN plans.

I'd wager that most householders are only passably interested, if at all, in the mechanics of the wholesale internet market.

If this approach succeeds in keeping voluntary switchover to the NBN at low levels, the Liberals will claim at the next election that their scepticism has been right all along. Conversely, Labor will rightly be able to claim sabotage by self-interested Liberal state governments that will have been favouring their political dogma over opt-out legislation that is arguably in every householder's best interest.

The real question is: which picture of the truth will end users buy? And will the inevitably substantial number those who will inevitably stick with the plans they have now cause a cost blowout when NBN Co is forced to revisit millions of properties to terminate their local connection to the new network?

This last issue is a real possibility — a looming shadow over the NBN roll-out. It's easily solved by doing the right thing: mandating a fibre connection, just as electrical and plumbing connections are now mandatory. But whether or not the easy thing, and the done thing, are the same thing, may well be in the hands of those who have little interest in making it easier for the NBN.

What do you think? Can the NBN succeed even if opt-out legislation is kneecapped? Should the Liberals give in to inevitability and support opt-out legislation to give the NBN a fair go? Or are they right in obstructing it in any way they can?

Topics: NBN, Broadband, Government, Government : AU, IT Employment

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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