Labor, Greens slam analysis for favouring 'dog's breakfast' NBN

Labor, Greens slam analysis for favouring 'dog's breakfast' NBN

Summary: The government's NBN cost-benefit analysis report said exactly what the government wanted it to say, Labor and the Greens have said.

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Labor and the Greens have said that the NBN cost-benefit analysis report commissioned by the Coalition government and developed by known critics of the former Labor government was always going to favour Communications Minister Malcolm Turnbull's "multi-technology mix" over fibre to the premises.

The report, released late yesterday evening, found that because the fibre-to-the-node rollout could be delivered quicker, and at less cost than fibre to the premises under the NBN Co strategic review, the benefits would flow faster than those that would be available down the track, when fibre to the premises is completed.

The report also claimed that Australians would be unwilling to pay higher amounts of money for incremental speed improvements on the higher-speed tiers. Should high-bandwidth applications come along that make Australians more willing to pay for those speeds, the report said that the government could upgrade the NBN from fibre to the node and hybrid fibre-coaxial (HFC) to full fibre to the premises. However, although the panel argued this would be more cost effective, the cost of the upgrade was not included in the report.

Shadow Communications Minister Jason Clare said last night that the "independent" panel for the cost-benefit analysis was full of critics of the Labor government.

"Instead of appointing Infrastructure Australia to do the cost-benefit analysis, he has hand-picked former staff and some of the most vociferous critics of the NBN," Clare said.

"This includes well-known critics of the NBN Henry Ergas and Kevin Morgan, former adviser to Malcolm Turnbull Alex Robson, and former Liberal Party staffer David Kennedy.

"This is not the independent cost-benefit analysis by Infrastructure Australia that Malcolm Turnbull promised. Obviously, Infrastructure Australia was too independent for him. He has hand-picked people that he knows will give him the answer he wants."

The report overlooked the cost of maintaining and operating the copper and HFC networks, Clare said.

"NBN Co has not yet gained access to the copper or HFC networks, and the cost of operating, maintaining and enhancing this network has not been revealed," Clare said.

Greens communications spokesperson Scott Ludlam said this morning that the "hand-picked team of NBN sceptics" gave Turnbull "exactly the report he wanted".

"I don't think this document advances the debate or the cause of the NBN by so much as a millimetre," he said.

"NBN Co's own figures under new management show that for roughly the same amount of government equity, you could have a fast, end-to-end, fibre network that would be completed three years later than a dog's breakfast of a model that would effectively be obsolete on the day it is built."

Ludlam said that some of the numbers in the report were "cooked", with much of the information about acquiring and maintaining Telstra's copper network redacted, and the benefits figures just an estimate.

"Exactly how do you model the financial, non-financial, community, education, or healthcare benefits of an enabling network like the NBN four decades into the future? You just make up a number. It's actually not much more sophisticated than that," he said.

"That's what they've done, and that's how they've been able to come up with a number that, by stunning coincidence, is exactly what Malcolm Turnbull wanted."

He said the NBN debate should be focused on what is needed 50 years into the future, and not just in the next 10 years.

Topics: NBN, Government, Government AU, Australia

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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Talkback

15 comments
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  • .

    So many flaws in this report I don't know where to begin.

    Even blind Freddy in the Coalition Party Support room should be able to see.

    Here is a hint, if your a business supporting the NBN, don't rely on MTM.
    DanielZenno
  • 10 yr vs 50 yr debate

    The debate should be focused on the next 10 years not the next 50. Given how quickly IT moves there isn't a person alive today that would have the slightest clue about what the needs in 50 years will be or how it will be delivered.

    As for which way to roll out NBN now... Well whichever is truly quickest should be the one we go for otherwise it will be another 10 years before anything happens.
    aesonaus
    • Disagree

      In 10 years time the MTM will be obsolete in terms of meeting the Internet needs of the country and we will need to pay again for it to be upgraded.
      The idea of doing something of this magnitude in stages only makes sence if the middle stages will provide enough of a benefit before needing to move onto the next stage. But in 10 years time we will need more than what a congested partial copper or HFC network can give us.
      If we had started doing a FTTN rollout 10 years ago it would be complete by now and we could now be looking at upgrading to FTTP like almost every other country in the world is doing.

      Here is another way of looking at it.
      We spend $30 Billion now (LNP figure) for their MTM. Takes 6-8 years to roll out.
      In 6-8 years we need better Internet Infrastructure so updgrade to FTTP (which Malcom Turnbull has stated is the end game). We then spend another $? Billion (dotn know as none of the 5 reviews/reports of the LNP into the NBN has ever gone into this). So lets say its another $30 Billion (after all they have to go BACK to EVERY street and lay more fibre for the last 800m [FTTN] or lay km of fibre where HFC has been used). This takes another 5-7 years to complete.
      Total Cost = $30 B
      Total Time = 11 - 15 years (assuming that once MTM is done we waste NO TIME in figuring out how to migrate from MTM to FTTP - we know this wont happen for for arguments sake and best case scenario lets run with it).

      Those on FTTN still suffer Internet dropouts, and speed degredation when it rains.
      Speed loss due to conjestion.
      UP TO speeds (pay for 100 Mbps get 2 Mbps)

      OR

      We spend $40 B now on FTTP which takes 8-10 years to roll out.
      There are NO ISSUES with copper over 70 years old.
      No issues when it rains.
      No issues at 4pm when all our kids get home from school and jump on the Internet for study or relaxation.
      Everyone gets the speeds they pay for (well within 5% of what they pay for as NO Internet method will deliver guaranteed maximum speeds (ie TCP/IP overheads)), rather than an UP TO like the British Telecom FTTN model where you can pay for the highest 76 Mbps download speed but you may only get 2 Mbps. Dont forget the MTM has been heavily referrenced based on the BT FTTN model.
      DmacD79
  • Tony Windsor

    got it correctly. Do it right. Do it once. Do it in fibre.
    KRP1950
  • cost-benefit analysis

    It will be really interesting what happens when Labor gets elected. Will they call for an independent cost-benefit analysis?
    TomAnderson-3ecad
  • That report isn't even fit for toilet paper

    It should have been done by Infrastructure Australia or the PC.

    And I haven't seen such rampant cronyism since the days of Joh Bjelke-Petersen...
    Tinman_au
  • It is sad because it is so critical but Politicians are hillarious

    Does anyone really believe that the Labor party or the Greens would not stack committees to their own advantage?

    I am not defending the Libs, they certainly have sorted this out to suit themselves, but those criticising them are what's left of the worst government this country ever had.

    It is amazing how when politicians become the opposition they suddenly discover their morality and forget all the underhanded things they did when in power.

    Sometimes it is hard to distinguish between the one side and the other especially politicians like Malcolm who has often appeared to be a Labor politician in Liberal's clothing. I think he would prefer FTTH but is stifled by party politics.

    Personally, I live in the bush and I would prefer the NBN to concentrate on getting the Wireless NBN up and running at great speeds and for the same cost per GB to the public as the fibre network. With the proliferation of handheld devices, the wireless NBN will soon become the most used network and so deserves to get priority.
    Gary O'Connor
    • Wireless isn't cheap

      The issue with wireless is people assume its going to be cheaper to build, but often to provide the same levels as a fixed service requires a lot of WAPs/towers etc, plus it still needs fibre backhaul.
      Then ask people what happens when there are too many people on it. You can build it for an ideal everyday scenario, but it soon fails when a larger number of people decide to use it. Yep great for phones and tablets, but we really need the bigger pipes to as many businesses and houses as possible.
      One thing the report doesn't really cover is the business it will create. Did anyone think we'd do banking online when copper went in or even when we first started to email? Those that did suggest it were probably were shot down. I find it amusing that a $5 Bill PPL is a good idea yet for 3 years without the PPL we could fund a full FTTP, something that will give mothers greater flexibility to work from home.

      Wireless has its place its just never going to be great for replacing a fixed connection in more built up areas. But I agree a decent fixed wireless service in many country areas would be an improvement. I think the biggest issue with Labors NBN was the plan. MY take was country towns probably should have got fixed wireless in the first case for say a certain population. Easier to roll out as well. Also FTTB should have been done from the beginning for large apartment complexes. Then had a plan to put FTTP in elsewhere with upgrades to the fixed wireless and FTTB towards the end of the rollout.

      Governments are really salespeople in many ways, and the coalition has sold the MTM model as good enough and a saving, but any unbiased person can see it won't really save money. It just gives the appearance of saving money and providing a political differential between the two parties.
      Justin Watson
  • Cost benefit analysis?

    More like the Turnbull benefit analysis. Malcolm, the champion of number juggling and dodgy reviews. The only one Turnbull is fooling is himself.
    Lastofthegoodguys
  • Dr. Ghostly

    Can't Labor and the Greens appoint Infrastructure Australia to do a real and transparent cost-benefit analysis? It is pure pain that Labor and the Greens had their chance to do much better than proof of concept. Best plan worst implementation. Damn! I was supposed to have FttP in November 2013 - still nor here. Still not here. Still not here...
    Dr. Ghostly
  • Dr, Ghostly

    Still can't find a properly addressed opportunity cost equation.
    Have we all read the entire 196-page report? I have and it smells.
    
It is here: http://www.scribd.com/doc/237755803/Cost-Benefit-Analysis
    Of all the 'facts' in this report I still can't see an understanding of the concept of 'opportunity cost'.
    Put simply, an opportunity cost is a benefit, profit, or value of something that must be given up to acquire or achieve something else. Every economic decision has an associated opportunity cost. Opportunity costs are used in computing cost benefit analysis of a project and are vital to decision making.
    Mmmm!
    Dr. Ghostly
    • It's all Opex?

      To me, the strange thing is where the "independent" committee decided to add $1 billion per year to NBN's operating expense for fibre but not copper. Apparently they didn't understand the difference between fixing passive fibre vs. maintaining copper cables that require electrical current. Maybe I'm mistaken, but the MTM gains are all in that $1 billion annual fudge for "opex".
      TomAnderson-3ecad
  • Whats really funny about the CBA

    So how they can predict the future saying we will only be using 15Mb by 2023. But get this apparently from the report our average speed is 12Mbps when last time I heard it from REAL reports we where 42nd in the world at 6Mbps. If take up rates for 100Mpbs at more than 15% FTTP will be better when reports coming out saying that take up rates for the NBN are at 20% on 100Mbps.
    So WTF information where they looking at
    JasonKent
  • Dr. Ghoslty

    Yes, it is passing strange that the wealthy business owners and farmers seem to have voted for the Coalition - they probably should be significant advocates for all Fibre in the light of their own commercial interests. I see for example, even the little fish in the barrel like Harvey Norman having trouble pushing 3D and 4K television if no one can use it. Goodness knows what is in the near future in terms of commercial opportunities lost simply because the clowns are running the circus. That is what I mean by a comprehensive and detailed statement of Opportunity Cost. It is not just the main players, ISPs and their customers whom this government has shot in the foot over the NBN.
    Dr. Ghostly
  • Me?

    I am still waiting for the CBA. Do we know when it is coming out??

    Are they doing one?
    Darren.Bennett